Attorney to landlords: Don’t reject rent relief payments to avoid paying taxes

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    Hawaii (KITV) — The state reports it’s given out $57 million in rent relief and housing assistance for people negatively impacted by the COVID-19 pandemic.

Another $63 million in payments is stuck in the system — some because landlords aren’t accepting them.

Tax attorney Tom Yamachika says some landlords who have not been paying general excise tax on their rental income are rejecting CARES Act money to avoid getting on the state’s tax radar.

But Yamachika warns property owners the Department of Taxation is aware of the issue and will find a way to collect back taxes.

“There are laws that needed to be followed and you didn’t do it. If you come clean, there will be pain but it’ll be less pain than if the state comes with their teams of auditors and collectors and so forth and there may be breaks that the state can give you like on the penalties and such,” he said.

Also, landlords who don’t accept rent relief payments may end up having to evict struggling tenants when the moratorium expires.

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