HB 862 now goes to the full House and Senate for further consideration and voting, but the agreement reached Thursday night strongly suggests key House and Senate leaders intend to push the bill through in the final days of the session. “Everybody is desperately working to recover an economy that has been disproportionately affected by the COVID-19 pandemic, and we should be looking to support these businesses rather than saddling them with additional costs,” Hannemann wrote. Mufi Hannemann, former mayor of Honolulu and president and CEO of the Hawaii Lodging & Tourism Association, said the association “feels strongly that now is not the time to place additional cost burdens on local businesses.” “While recognizing the devastating impacts the pandemic has had on our state overall, I humbly request continued support of TAT funding to help Maui County with the associated costs in providing public services to residents and visitors, without adding a surcharge to the existing TAT,” Victorino wrote. Maui Mayor Michael Victorino noted in written testimony that “our current taxes and fees already make us one of the highest visitor tax rates in the nation.” The counties oppose legislation that would allow them to impose an extra 3% in hotel taxes. Visitors lounge on the shores of Waikiki Beach during the COVID-19 pandemic. The new arrangement would essentially force the counties to increase the hotel room tax themselves if they ever hope to recoup the $103 million they would permanently lose to the state. Not surprisingly, the counties this year have opposed similar proposals. Further details of the plan and the written draft were not available Thursday evening. Instead, the measure would give the counties the authority to impose their own hotel tax surcharge of up to 3%. On Thursday night lawmakers merged elements from House Bill 321 into House Bill 862 to create a new bill that makes that interruption in cash flow permanent by ending the distribution of the existing hotel tax levy to the counties for good. The counties have not received their share of the hotel taxes for the past year. David Ige abruptly used his emergency authority to entirely halt distribution of the hotel tax revenue to the counties in an effort to cope with the state’s huge budget shortfall. In fact, when the pandemic hit last spring, Gov. However, the Legislature often flirts with the idea of grabbing the counties’ share of the hotel room tax to help finance state operations and projects. The counties must provide services such as police and fire protection, park maintenance and waste disposal for millions of tourists each year, and the hotel tax money is supposed to help the city and counties cover the cost of those services. State law now requires that $103 million of the revenue from the hotel room tax be divided up each year among the counties to help offset the demands of mass tourism. Cory Lum/Civil Beat/2020įor many years there has been an annual skirmish at the Legislature over the counties’ share of the 10.25% tax, and despite the objections of the counties, the agreement lawmakers reached on the issue Thursday essentially resolves the dispute in the state’s favor. Lawmakers have tentatively agreed to give the counties the authority to levy a new tax of up to 3% on Hawaii hotels in addition to the existing state tax of 10.25%. The Waikiki hotel district is seen here from Diamond Head. The bill to allow the counties to levy their own hotel room tax is the latest chapter in a long struggle over the lucrative hotel room tax, officially known as the transient accommodations tax. They have until Friday night to finalize almost all of the bills that will pass this year. Legislators are hurrying to wrap up negotiations this week on an array of bills in advance of the scheduled adjournment of this year’s session next week. Lawmakers also tentatively agreed Thursday to a significant boost in the state conveyance tax that would be imposed on sales of the most expensive non-owner occupied homes in Hawaii. House and Senate lawmakers gave preliminary approval Thursday to a measure that would allow the counties to levy their own tax of up to 3% on hotel rooms and vacation rental units, a move that one lawmaker said would “incentivize” the counties to crack down on illegal vacation rentals.
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