"I wonder how the tax gets collected if there is no permit required. Can the owners just pocket the tax if it isn't a mandatory thing ? If the owners never have to register why would they pay tax unless they felt like it?"
My guess is that obtaining a permit to operate, if required, is one step, while registering any rental in order to remit taxes collected is a completely separate step.
Either way, if you rent your home for money, it's definitely mandatory to collect taxes, but I have no idea how Maui collects the proceeds from private owners.
Here is a breakdown of a rental at Honua Kai that I'm eyeing for 2020:
$369.71 x 7 nights $2,588.00
$473.40 fees (Parking Fee $119.00; Administrative Fee $179.40; Cleaning Fee $175.00; Service Fee $291.00)
$403.30 taxes
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$3,755.70
FYI, taxes are ~15%. No mention is made of TAT and GET being collected after, so I assume it's embedded in the rental rate...?
I wonder what would happen if a renter was in one of these units when it was busted. This crack down, if successful, might make it worth while to rent Maui timeshares as a safer option to vrbo type rentals.
While it does appear that Maui is going to try and catch illegal operators, the firm they hired is focusing on identifying illegal owners in non-exempt areas such as subdivisions where neighbors have a vested interest in shutting these rentals down (because of the noise/traffic)...and politicians have a vested interest in keeping those potential voters happy. No mention of going after legal rentals that under-report mandatory tourist taxes.
My biggest fear as a renter wouldn't be that I'd be "busted" while I was occupying the place, because it's really a matter between the owner and Maui County, and I'm under no legal obligation to vet rentals for tax collection. No, I'd be more concerned that my rental would be shut down by the county after I booked but before I arrived. IMO, a timeshare rental would certainly be safe because management would be responsible for collecting those taxes. But, I'd also consider a VRBO rental to be pretty safe vs. one off a private website, because VRBO/AirBnB is presumably the first place that Maui County is going to crack down on if the place is illegal.
No matter what, my takeaway here is that I'd be MOST concerned about renting a homes/condos in a residential areas vs. a hotel zone. If I wanted to rent a private home, I'd definitely do my due diligence and ask questions from the owner and/or search the link to make sure the owner has a permit so that I wouldn't arrive on Maui and find my rental unit shuttered.