HAR § 18-237D-3-01 — Exemptions

(a) Exempted from this chapter are the following: (1) Health care facilities including hospitals, freestanding surgical outpatient facilities, skilled nursing facilities, intermediate care facilities, adult residential care homes, adult foster care homes, special treatment facilities and programs, home health agencies, freestanding birthing facilities, adult day health centers, and independent group residences. (2) School dormitories of a public or private educational institution providing education in grades kindergarten through twelve, or of any institution of higher education. (3) Lodging provided by nonprofit corporations or associations for religious, charitable, or educational purposes; provided that this exemption shall apply only to the activities of the religious, charitable, or educational corporation or association as such and not to any rental or gross rental the primary purpose of which is to produce income even if the income is used for or in furtherance of the exempt activities of such religious, charitable, or educational corporation or association. (4) Living accommodations for persons in the military on permanent duty assignment to Hawaii, including the furnishing of transient accommodations to those military personnel who receive temporary lodging allowances while seeking accommodations in Hawaii or while awaiting reassignment to new duty stations outside the State. This exemption does not apply to transient accommodations provided to persons in the military on permanent duty assignment in the State and who have temporarily departed from their permanent homes and principal establishments elsewhere in this State. Example. A captain in the United States Army rents a condominium unit in Waikiki for one month while looking for permanent housing in Hawaii. The gross income received by the hotel operator is not subject to the because the captain is seeking living accommodations in Hawaii. (5) Low-income renters receiving rental subsistence from the state or federal governments and whose rental periods are for durations shorter than sixty days. (6) Operators of transient accommodations who furnish accommodations to full-time students enrolled in an institution offering post-secondary education. This exemption shall also apply to operators who furnish transient accommodations to students during summer employment. Example. A pineapple company provides lodging to employees who travel to Lanai to work in the pineapple fields. During the summer, the pineapple company employs high school and college students to work in the fields on Lanai and provides lodging to the students during their period of summer employment. Although the lodging provided by the pineapple company is for a period of less than 180 days, the pineapple company is not subject to the transient HRS §237D-2 HRS §237D-3 §18-237D-3-01 237D- 13 (Unofficial Compilation as of 12/31/2025) accommodations tax for such lodging because operators who furnish transient accommodations to students during summer employment are exempt under the law. (7) Accommodations furnished without charge such as, but not limited to, complimentary accommodations, accommodations furnished to contract personnel such as physicians, golf or tennis professionals, swimming and dancing instructors, and other personnel to whom no salary is paid or to employees who receive room and board as part of their salary or compensation. (8) Accommodations furnished to foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes. Example. The Consul General of Australia is in Hawaii for official business and rents a hotel room in Waikiki for one week. The Consul General holds a card issued by the United States Department of State granting an exemption from state hotel taxes. The gross income received by the hotel operator will not be subject to the transient accommodations tax. (b) Accommodations furnished to transients who present cards or certificates stating that the holder is exempted from state hotel room taxes are nevertheless transient accommodations and their operators are subject to the tax except as provided in chapter 237D, HRS, and these rules. (c) There is no exemption for gross income received by an operator for the rental of transient accommodations to a nonmilitary employee of the federal government or an employee of a state government. Example. An employee of the United States Department of the Interior is in Hawaii for official business and rents a hotel room in Waikiki for one week. The gross income received by the hotel operator is subject to the because there is no exemption for renting transient accommodations to a non-military employee of the federal government. (d) The director shall determine the sufficiency of the proof necessary for the application of the exemptions set forth in subsection (a). The necessary proof includes the following: (1) To qualify for an exemption under subsection (a)(4) the operator shall require that the person in the military on permanent duty assignment present the following at the time of check-in: (A) An identification card with a serial number which verifies the person’s military status; and (B) A copy of the orders prepared by the military organization verifying the period for which the temporary lodging allowance is received. The operator shall maintain copies of documents supporting any claim for an exemption under this paragraph for three years. (2) To qualify for the full-time student enrollment exemption of subsection (a)(6) the operator shall require the student to submit proof signed by the registrar or other authorized agent of the post-secondary institution certifying the full-time enrollment of the student for each school semester. For the purpose of this paragraph, full-time enrollment is defined as follows: (A) For an undergraduate student: (i) Twelve credits or more per semester; or (ii) Six credits or more per summer term. (B) For a graduate student: (i) Eight credits or more per semester when the student is enrolled in two or more graduate level courses; (ii) Nine credits or more per semester when the graduate student is enrolled in one graduate level course; (iii) Twelve credits or more, when the student is enrolled in no graduate level courses; or (iv) Six credits or more per summer term.