The bill amends Chapter 666 of the Hawaii Revised Statutes by requiring landlords to present proof of tax payments before obtaining a writ of possession. Specifically, landlords must submit either general excise tax returns reflecting rents paid or a tax clearance certificate from the state taxation department. This change aims to improve taxation compliance among landlords and enhance state revenue collection efforts, addressing a loophole that allowed certain tax-exempt conditions to exist.
SB2879 addresses taxation issues related to irregular landlord-tenant arrangements, such as rent-to-own agreements and work-for-room arrangements. The bill aims to ensure that landlords adhere to tax obligations before initiating summary possession proceedings. This is particularly relevant as landlords in such agreements have previously leveraged summary proceedings without fulfilling necessary tax payments, potentially leading to revenue loss for the state.
Debate around SB2879 may arise regarding its implications for landlords and tenants. While the bill seeks to streamline tax compliance, some argue it may impose additional burdens on landlords, particularly those operating under irregular arrangements. Critics may express concerns about the practicality of demanding tax documentation in urgent dispossession cases, arguing that it could lead to delays in securing housing for tenants. However, proponents contend that reinforcing tax accountability is essential for equitable treatment of landlords and tenants alike.