Transient Accommodation Tax (TAT)

STATE

Gross rental proceeds earned in Hawaii for rentals with durations shorter than 180 consecutive days, is required to be reported on a periodic and annual transient accommodation tax (TAT) returns with a tax rate of 10.25%. The tax is based on gross rental income received and is in addition to any GET liability on the same reported income. The frequency of filing periodic returns (TA-1) depends on the forecasted annual TAT liability for the year.

Monthly filing if your GET will be > $4,000
Quarterly filing if your GET will be $2,000-$4,000
Semi-Annual filing if your GET will be < $2,000

An annual reconciliation (TA-2) also needs to be filed by April 20th after the close of the calendar year.

COUNTY

Counties in Hawaii independently assess an additional county accommodations tax which is paid separately from the state TAT. Each county has instituted a 3% county TAT. Each county TAT follows the deadlines for TAT-1 and TAT-2. The required payments are made electronically on each county's website, or by using the following payment vouchers::

Hawaii - periodic form HCTAT-1 and annual form HCTAT-2, if applicable
Maui - periodic form MCTAT-1 and annual form MCTAT-5, if applicable
Oahu - no mail-in payment allowed; required online portal payment at OTAT
Kauai - no mail-in payment allowed; required periodic online portal payment at [website: www.hawaiicountiestat.us] and annual form KTAT TA-2

Experienced with TAT registration, reconciling income to report, catching up and filing required TAT returns.

TAT - Q&A

Question: What is a transient accommodation?

Answer: Transient accommodation is a room, apartment, house or any other living accommodation rented to a person for less than 180 consecutive days at a time.

Question: What is TAT?

Answer: The transient accommodation tax is imposed on gross rental proceeds from transient accommodations at a rate of 10.25%.

Question: Do I have to pay TAT if I already pay GET?

Answer: Unfortunately, yes. TAT is a separate tax from GET and is for reporting transient accommodation income. You must file both TAT and GET returns and pay TAT and GET.

Question: Should I pass on TAT and GET to the renter?

Answer: If you show GET and TAT separately on the rental statement, then TAT is not subject to GET. However, GET passed on is still taxable income for GET purposes. If you do not show GET and TAT separately and just show a flat rental fee, than you are required to pay TAT and GET on that flat rental fee.

Question: What are gross rental proceeds?

Answer: Gross rental proceeds subject to TAT includes daily rental rate, management fees, cleaning fees, maintenance fees, and resort fees. Gross rental proceeds do not include guest amenities such as laundry services, telephone service, or meals.

Question: What is the penalty and interest for not paying TAT?

Answer: The penalty for failure to filing a TAT return is 5% a month, or partial month, on the unpaid tax up to a maximum of 25%. If the TAT return was filed on time, but the tax not paid within 60 days of the due date of the return, a penalty of 20% of the unpaid balance will be assessed. Interest is calculated at 2/3 of 1% per month, or partial month, on unpaid taxes and penalties beginning with the first calendar day after the due date of the payment, whether or not the first calendar day falls on the weekend or holiday.

Question: Where can I find more information on TAT?

Answer: TAT can be complex and the cost for us to determine your fair market value gross rental proceeds, filing your periodic and annual TAT returns, may be less than any penalties, interest, and tax examination. If you would like to file your TAT returns, please see the department of taxation TAT brochure, periodic return instructions, and annual return instructions.