Ilayisensi yebhizinisi e-Hawai'i
These information pages can help you get started in learning about some of the laws and registration requirements that may apply to your Experiences on Airbnb. These pages include summaries of some of the rules that may apply to different sorts of activities, and contain links to government resources that you may find helpful.
Please understand that these information pages are not comprehensive, and are not legal advice. If you are unsure about how local laws or this information may apply to you or your Experience, we encourage you to check with official sources or seek legal advice.
Please note that we don’t update this information in real time, so you should confirm that the laws or procedures have not changed recently.*
If I’m hosting an Experience in Hawai‘i, could I be considered a business in the eyes of the law?
Because you expect to earn money or other economic benefits from hosting, then yes, you will probably be considered a business under state regulations.
What should I be thinking about if I am considered a business?
The State of Hawai‘i’s Department of Taxation (“DOTax”) requires all businesses to secure a general excise tax license. The State also requires that you pay a general excise tax on all gross receipts generated as compensation for personal services or from trade, business, commerce or sales of personal property or services or both.
For purposes of the General Excise Tax, a “casual sale” is exempted from the requirement to pay excise tax. “Casual Sale” means an occasional or isolated sale or transaction involving tangible personal property that is not ordinarily sold in the business of a person who is regularly engaged in business.
As an Airbnb host, if you determine that you need to pay a general excise tax, you can do so by asking your guests to pay in person. However, in each case, it's important that you tell your guests of the exact tax amount in your listing, so they know the amount before they book. If you choose to collect sales taxes in person, please note that you need to collect it directly from your guests at the beginning of your Experience. Note that you cannot charge a customer more General Excise Tax than the business will pay on the transaction. We encourage you to speak to a tax advisor for more details, as there are many special rules in this area.
Are there registration requirements for Hawai‘i businesses? How do I register?
Yes. businesses in Hawai’i are required to register and obtain a business license with a tax identification number from the DOTax.
Below are the steps to register. This list is by no means exhaustive, so please check out the Hawai‘i Business Express Portal and contact the DOTax or speak to a lawyer to make sure that you’ve met all of the requirements.
Step 1: Choose your business structure. First, you’ll need to choose your preferred business structure: a Sole Proprietorship, Partnership, Corporation or Limited Liability Company. Go to http://cca.Hawai‘i.gov/breg/legalinfo/ to learn more about these different types of business structures.
Step 2: Choose your business name. You’ll also need to name your new business. You won’t need to fill out any additional forms if you plan to use your own name (such as “John Smith”); just fill your name on the State of Hawai‘i Basic Business Application, Form BB-1. Since hosts on Airbnb typically use their own name on their Listings, this option should generally work for Hosts.
If you don’t want to use your name for your business, you must register a fictitious business name (“FBN”). To do this, first make sure that the name that you want is available using the State of Hawai‘i, Department of Consumer and Consumer Affairs (“DCCA”), Business Name search. There is a link to the DCCA website at the Hawai‘i Business Express Portal. If the name is available, you must register your business name with the DCCA by filing an Application for Registration of Trade Name and pay a filing fee of $50.
Step 3: Choose your business location. To register your trade name with the DCCA and the Form BB-1 with the DOTax, you’ll need to include the address where you run your business (i.e., a business address, shared workspace or at home). If you run a business out of your home and you live in an area that is zoned residential, your county planning department may require you to use your home predominantly as a place to live and not as a place of business. This means:
- You shouldn’t run a business office out of your home that is open to the general public;
- No advertising can be added to the home;
- You can’t physically change the home in a way that makes it non-residential; and
- No employees who do not already live in the home may come to the home for business purposes.
Zoning laws vary by county. Zoning laws also change periodically. What may be okay today may not be okay in the future. You should check with your county planning department or speak with a lawyer before conducting an Experience out of your home.
Step 4: Register with the DOTax. Before you run your Experience, or as soon thereafter as reasonably possible, you will need to register with the DOTax and apply for a business license. You can do that online at the Hawai‘i Business Express Portal and there is a one-time fee of $20. In Form BB-1, you’ll be asked to describe your business structure, business name, the nature of your business, mailing address, contact information and whether you will employee anyone (if you have employees the tax identification number will also be your state employer identification number).
Example: Anne is a Trip Host who runs Experiences one week per month where she brings her guests to her favorite restaurants and cocktail bars in the Chinatown. She runs her Experiences alone and makes about $1,000 per month, which helps her supplement her earnings as an artist.
Anne registers as a business with the DOTax within 15 days of when she first runs her Experience on Airbnb. She:
- Picks a Sole Proprietorship structure;
- Decides to use “Annie’s Chinatown Foodie Tours” as her FBN and registers that trade name with the DCCA for $50 (that’s how she lists her trip on Airbnb);
- Picks her own home as her business address; and
- Applies for her business license with the DOT, obtains a tax identification number and pays her $20 license fee.
So far, Anne has paid $70 in registration/licensing fees to register her business. Anne will have to pay the GET related to her business activities, but the registration license fees are one-time fees with one exception: Anne’s initial registration of her FBN trade name is good for five years. At any time during the six-month period preceding the expiration date, Anne will have to file a one-time renewal registration of the trade name at a cost of $50.
Is there anything else that I should be thinking about?
Yes. You should consider the following:
Activities and Licenses
Depending on the activities involved in your Experience, you may need to register, obtain licenses or follow specific rules that apply to that activity. Our section on the various activity specific topics covers some of the typical activities, but it is not exhaustive. You should check with the appropriate state and county agencies or speak with a lawyer to determine which permits and licenses may be required for the Experiences you are offering.
If you plan to hire employees as part of your business, you may also be required to obtain an employer identification number (EIN) from the IRS.
Note: A sole proprietor without employees can use his or her Social Security Number instead of EIN. The IRS also provides other useful information on taxes that apply to small businesses.
Tax and Accounting
You should also check what tax and accounting rules apply to you, as you may need to pay personal income and sales tax in addition to business property tax. Also make sure you have the right insurance in place to cover all the activities you will be providing.
Are there additional laws that apply to me as a result of my being a registered business?
Yes. Several consumer protection laws, like the Federal Trade Commission Act and the unfair competition laws, require you to truthfully describe your Experience in your Listing so your guests can make informed decisions. This means the following:
- The information that you provide to guests must be accurate and not misleading;
- You accurately and completely describe in your Listing the main characteristics of your Experience, as well as what is included and any special terms and conditions (for example, my favorite local craft cocktail bar Experience includes the first round of drinks, but guests must pay for additional drinks out of pocket);
- You do not offer a service that you do not intend to provide; and
- Your price is accurate, and you do not list an Experience at one price and then charge an additional fee when your guests get there.
In sum, you need to provide the services advertised in your listing, within the advertised dates and times, at the advertised price. For more information, the FTC provides helpful guidance on truth-in-advertising, which we encourage you to review.
*Airbnb is not responsible for the reliability or correctness of the information contained in any links to third party sites (including any links to legislation and regulations).
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