If you own or plan to buy a vacation rental in Waimea or South Kohala, the rules around Hawai‘i lodging taxes can feel confusing. You want to stay compliant, price your property correctly, and avoid penalties while keeping bookings strong. This guide breaks down what you need to know about state TAT, potential county lodging taxes, and the new “green fee” concept so you can operate with confidence. Let’s dive in.
TAT basics: what it covers
The Transient Accommodations Tax, or TAT, is a Hawai‘i state tax on income from transient stays. It generally applies when a guest stays for less than 180 consecutive days. If you rent a condo, home, or room for short stays, you should assume TAT applies.
The tax base includes the gross rental proceeds from the stay. That usually means your nightly rate plus mandatory charges tied to the lodging. Optional items that are clearly separate from the accommodation may be treated differently, so it is important to review each fee.
Common taxable items under TAT
- Nightly room or unit rate
- Mandatory cleaning fees or required service/processing fees
- Resort or amenity fees, and parking if bundled with the stay
Items that may have a different treatment include optional tours or equipment rentals that are clearly separate from the lodging. If a booking extends beyond short‑term thresholds or involves a long‑term lease, different rules can apply.
Registering and filing TAT
You must register with the Hawai‘i Department of Taxation to collect and remit TAT. In many cases, you also need a General Excise Tax (GET) license because rental activity is a business activity in Hawai‘i. Once registered, you will file and pay on a schedule set by the Department, often monthly, quarterly, or semiannually based on your liability level.
Online travel platforms sometimes collect and remit taxes for you in certain jurisdictions. Even when a platform collects, you should confirm who is legally responsible for each tax and keep documentation for your records. Maintain a clear audit trail of bookings, gross receipts, platform remittances, and your filed returns.
County rules in Waimea and South Kohala
Operating a short‑term rental legally in Hawai‘i County requires more than state tax registration. You also need to make sure your use is permitted by local zoning and that you have any required county permits or registrations.
Zoning and permit status
Short‑term rentals and related uses, like transient vacation rentals or bed and breakfasts, are regulated by Hawai‘i County. Whether your property can be used for short‑term stays depends on your zoning, any prior approvals, and current county ordinances. If you are unsure, contact the County Planning Department to confirm your property’s status. Operating without required permissions can lead to fines or enforcement actions.
County lodging taxes and how to verify
Counties in Hawai‘i may impose their own lodging taxes or surcharges. Hawai‘i County may collect a separate county transient tax or receive a portion of state TAT. Procedures and rates can change, and filing can be separate from state returns. The safest path is to verify the current county lodging tax rate, registration steps, and filing method with the County of Hawai‘i Department of Finance or its Taxation Division before you accept bookings.
Enforcement and compliance
County enforcement is active. Listings that do not comply with zoning and permitting rules risk fines, removal orders, liens, or other actions. Grandfathered or registered properties must still collect and remit taxes. Maintain good records, keep your permits current, and make sure your online listings reflect your legal status.
The “green fee” concept
You may hear about a “green fee” or visitor impact fee. This is a proposed or newly adopted charge designed to fund environmental protection, climate resilience, or tourism mitigation. It can be set at the county or state level. If implemented, it will affect your pricing, invoicing, and remittance workflow.
What to confirm about a green fee
Because programs evolve, confirm these points with the County Council records, the County of Hawai‘i Finance Department, and the Department of Taxation if a fee is adopted:
- The fee amount and whether it is per night, per unit, or per booking
- Who must collect it, owner or platform, and how often it must be remitted
- Any exempt categories, such as longer stays, local residents, or certain age groups
- Whether the fee is taxable under TAT or GET
- How revenue is used and whether that affects how it must be displayed on invoices
Pricing and display strategy
A new per‑night or per‑booking fee can change how guests perceive your price. Decide early whether to include the fee in your base rate or show it as a separate line item.
- If you include it in the rate, your headline price may rise, but your checkout page will look simpler.
- If you list it separately, your base rate stays competitive, but the total at checkout increases.
Either way, check your booking platform’s rules on how fees must be displayed and labeled. Update your listing settings and guest communications so there are no surprises at checkout.
Is the green fee taxable
Some government‑mandated charges are taxable under TAT or GET and some are not. If a green fee is implemented, confirm its tax treatment with the Department of Taxation and then mirror that treatment in your pricing, invoices, and returns.
How to show taxes and fees to guests
Clear presentation builds trust and reduces disputes. Decide whether to show TAT, any county lodging tax, and a green fee as separate line items or to include some or all in your base rate. Whatever you choose, be consistent across your listing, quote, and invoice. If a platform collects a tax on your behalf, save the platform statements and match them to your records.
Owner checklist for Waimea and South Kohala
Use this step‑by‑step list to organize your compliance plan and talk with your advisors.
- Verify zoning and permit status.
- Confirm that short‑term rental use is allowed for your property. Check for any required transient vacation rental or similar permit with the County Planning Department.
- Register for taxes.
- Register for TAT with the Hawai‘i Department of Taxation. Obtain a GET license if required.
- Check with the County of Hawai‘i Finance Department for any separate county lodging tax registration.
- Configure how you collect and display charges.
- Decide whether TAT, any county tax, and a green fee will be shown separately or included in the rate.
- Update platform settings and templates so invoices show required details.
- Set your filing calendar.
- Confirm filing frequency for TAT and any county lodging tax or green fee.
- Note due dates and set reminders to avoid penalties and interest.
- Coordinate with platforms or managers.
- Identify which taxes and fees, if any, are collected by platforms on your behalf.
- Obtain platform remittance reports to reconcile with your returns.
- Build your recordkeeping system.
- Keep booking logs, guest invoices, payout statements, and filed returns.
- Maintain a spreadsheet that calculates gross receipts, taxable base, tax or fee amounts, and your remittances.
- Plan for operational updates.
- If a new fee is adopted, update listing language, automated messages, and confirmation emails.
- Notify guests with existing reservations if changes affect their invoices.
- Consult local experts.
- Speak with a Hawai‘i‑based CPA or tax attorney on taxable items and filing details.
- Confirm land‑use compliance with County Planning if you are buying, selling, or changing use.
Real‑world scenarios to expect
Here are common situations owners face and how to think through them.
Platform collects some taxes, not others
A platform may collect TAT, but not a county lodging tax or a new green fee. In this case, you still need to register, collect the remaining charges, and file what the platform does not remit. Keep platform statements as proof and reconcile them against your records.
Mandatory cleaning fee changes
If you add a mandatory cleaning fee or change how it is charged, revisit your tax setup. Mandatory fees tied to the stay are generally included in the taxable base. Update your invoices and your spreadsheet so the taxable amount and any taxes or fees are calculated correctly.
Considering a rate change for competitiveness
If a green fee is adopted, test different pricing models before you publish changes. Run a sensitivity analysis where you: 1) absorb the fee into your rate, 2) list it as a separate line item, and 3) split the difference. Compare your projected net revenue and likely guest response in each case.
Keep records and reconcile regularly
Good records are your best protection. Keep all booking confirmations, itemized invoices, platform payout reports, and proof of remittances for the statutory retention period. Reconcile monthly so small discrepancies do not become large problems. If you delegate to a property manager, require regular reporting and keep copies.
Next steps for owners and buyers
Whether you already operate a vacation rental in Waimea or are evaluating a purchase in South Kohala, confirm your legal status, register for TAT, check county obligations, and prepare for any green fee. When you have a clear plan, you can forecast cash flow more accurately and set a pricing strategy that supports occupancy and compliance.
If you are weighing a purchase or sale, we can help you evaluate neighborhood fit, STR potential, and operational considerations with local context. Reach out to Kona Pacific Realty to connect with a seasoned West Hawai‘i advisor who understands both the market and the practical steps owners must take.
FAQs
Who collects TAT for Waimea short‑term rentals when I list on a booking platform?
- Some platforms collect certain taxes, but responsibility can remain with you. Verify which taxes the platform collects, then register and remit anything not covered. Keep platform statements as documentation.
Are cleaning and service fees taxable for Hawai‘i short‑term stays?
- Mandatory fees tied to the stay are generally included in the taxable base. Optional, clearly separate services can be treated differently. Confirm with the Department of Taxation.
How do I know if Hawai‘i County has a separate lodging tax for my rental?
- Contact the County of Hawai‘i Department of Finance or Taxation Division to verify current county lodging tax requirements, rates, and filing procedures before taking bookings.
What is the Hawai‘i “green fee” and do I need to collect it now?
- A green fee is a visitor charge intended to fund environmental and community programs. Whether you must collect it depends on current county or state law. Confirm status, start date, rate, collection rules, and taxability with county and state offices.
What are the penalties if I miss filings or operate without proper permits in Hawai‘i County?
- Penalties can include fines, interest on unpaid taxes, and county enforcement such as removal orders or injunctions. In serious cases, criminal penalties may apply. Stay current on registrations, filings, and permits to avoid issues.
