New Maui law could phase out more than 6,000 short-term rentals

After more than a year and a half of controversy and deliberation, the Maui County Council has passed Bill 9, which will phase out up to 6,200 short-term rentals (STRs) in apartment zones. In West Maui, apartment-zoned STRs will be required to cease operations by January 1, 2029. In the rest of the county, the deadline for phaseout will be January 1, 2031. 

However, a temporary investigative group formed to advise on the law has recommended creating two new hotel zoning districts on the island. This would allow around 4,500 units slated for phasing out to apply to continue operating as STRs. The County Council is considering the proposal.

The new ordinance, aimed at increasing the housing supply for locals, has been through an extensive review process, including scrutiny by county planning commissions, several hearings, and public testimony. Maui Mayor Richard Bissen signed the law on December 15, 2025.

Bissen introduced the bill in May of 2024, after a statewide law was passed giving counties more powers to regulate STRs in an effort to help relieve the state’s housing crisis. The catastrophic wildfires in West Maui in August 2023 that killed 102 people, destroyed more than 5,000 homes, and displaced more than 12,000 people were also a factor.

The state law specifies that counties have the power to regulate the time, place, manner, and duration of land and structures, as well as to phase out STRs through zoning regulations in residential and agricultural zones. Counties also have the power to allow transient accommodations for up to 180 consecutive days.

STRs in apartment districts on Maui are on the “Minatoya list,” which was created in 2001 in a legal opinion by Richard Minatoya, then deputy corporation counsel for the county. According to the opinion, condos that were built before March 5, 1991, and had already been approved for STR use by their condo associations could continue to operate as short-term rentals of fewer than 180 days. To do so, they had to have a permit from the county or state and not pause STR use for more than 12 consecutive months. Most of the STRs on the list — 60% — are in South Maui, with 36% in West Maui and 4% in Hana, Paia, and Molokai.

For tax purposes, STRs in Hawaii are defined as stays of less than 180 consecutive days. Income from STR operations is subject to state general excise tax (GET) and state transient accommodations tax (TAT). The state GET rate is 4%, while the state TAT rate will rise from 10.25% to 11% starting January 1, 2026, with the extra revenues dedicated to an environmental fund. Maui STR proceeds are also subject to county TAT and a GET surcharge. STR business owners may pass GET and TAT on to their guests.

Hawaii STR operators are required to register with the Hawaii Department of Taxation for GET and TAT licenses or tax ID numbers. For state-administered TAT and GET, as well as county GET surcharge taxes, operators must file lodging tax returns with the state and pay at the time of filing. For county TAT surcharge taxes, hosts file returns with the state, but pay the taxes to county tax authorities.

While STR marketplaces such as Airbnb and Vrbo collect taxes on behalf of their hosts in many states, they’re not allowed to do so in Hawaii. Operators are responsible for collecting and remitting them to state and local tax authorities.

Avalara MyLodgeTax can help Hawaii short-term rental hosts automate registration and filing for state and county TAT and state GET. For more on lodging taxes in the state, see our Hawaii vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.