A state judge on Thursday morning blocked an effort by Hawaii state tax department to force Airbnb to hand over names and addresses of thousands of vacation rental owners.
The state argued many of the owners are not paying excise and transient accommodations taxes.
Airbnb said it could not violate the owners’ privacy in sharing their personal information.
Judge James Ashford said the state failed to meet the legal thresholds to use its subpoena power.
According to the state attorney general, Airbnb officials had admitted Hawaii hosts who list properties on their site aren’t fully complying with state tax laws, which is why he wanted a judge to compel the company to release all receipts documenting their bookings with vacation rental operators statewide.
The attorney general needed the court’s permission to serve a subpoena obtaining this information from Airbnb because the investigation targets a group of taxpayers, not specific individuals.
According to court documents, state officials said they have the right to these receipts and other documents because Airbnb hosts have already contractually agreed that the company may disclose their information to government entities.
The attorney general’s filing goes on to say that the vacation rental operators do not have a constitutional right to privacy regarding their homes because they’re using them as commercial enterprises.
Airbnb lashed back with a court filing of their own that describes the subpoena “an unprecedented, massive intrusion” that violates state and federal law.
The company said the request requires them to provide private data from about 16,000 people and said there is no evidence that these hosts underpaid taxes.
Furthermore, Airbnb argued their representatives have been collaborating with state lawmakers on proposed legislation that will allow the company to register as a Hawaii tax collection agent to ensure the hotel and sales tax is paid by each host. But similar measures have been vetoed several times — most recently last year, when Gov. David Ige said it would have provided a “shield” for property owners who run illegal vacation rental operations.
For years, lawmakers have sought to address the issues caused by short-term, illegal vacation rentals. Among them: That the rentals ramp up an already hot housing market and push out local residents.
Experts say the number of vacation rental listings have skyrocketed in recent years, due in large part to online advertising.
On Oahu alone, there are an estimated 3,700 illegal vacation rentals and only 830 “grandfathered” legal listings, which were around before the county outlawed the practice in 1986.