Council unanimously passes 3% transitional accommodation tax for Maui County

Maui County Council unanimously passed Bill 101 today, a bill creating a 3% transitional accommodation tax.

“We didn’t want this bill, but the state legislature left us no choice when it voted to remove the county’s share of TAT revenue from the state budget,” said Mayor Victorino. “The county has spent a lot to provide services to our visitors with TAT revenues. This is one of the main ways we fund these services.

“We would also like to thank the County Council for delaying the start of the collection of the new tax to November 1, in order to allow sufficient time for the hospitality industry and the county to prepare,” said Mayor Victorino .

Deputy Council Chairman Keani NW Rawlins-Fernandez noted that on July 6, the state legislature overturned the governor’s veto to enact Law 1, opening the door for counties to collect their own TAT.

“Today our county walked through that gate and exercised our right to collect the county TAT instead of the state collected TAT that we have been stripped of and have not received since the start of the pandemic. “said Rawlins-Fernandez.

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County officials estimate the new tax will generate around $ 15 million in the current fiscal year, according to Rawlins-Fernandez.

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Bill 101 (2021), draft 1, establishes a transitional accommodation tax of 3% on all gross rents, gross rental income and market fair rental value considered taxable according to the definitions in article 237D-1, Hawai’i Revised Statutes.

According to Rawlins-Fernandez, the state TAT was established in 1987, and by 1990 about 90% of the revenue went to counties. “But the state repeatedly lowered the payout rate over the following decades. Counties received less than 15% in fiscal 2019. ”

“Each of Hawaii’s four counties is working on legislation to create its own transitional accommodation tax. We all recognize how vital this tax can be in helping us take advantage of the tourism industry, combat the impacts of tourism and improve the quality of life for all of our residents, ”she said. .

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“In anticipation of the new tax, the council also adopted at first reading today a bill aimed at increasing the expected revenues for the Fund for the Preservation of Open Spaces, Natural Resources, Cultural Resources and Scenic Views. , the Affordable Housing Fund, and economic and cultural development programs. Revolving fund, ”said Rawlins-Fernandez.

“One thing I am particularly looking forward to is having a Hawaiian cultural center in every district. Putting additional income into these funds will help ensure that we allocate county money to better meet the needs of our local communities, ”she said.

Rawlins-Fernandez noted that the county “bears the burden” of providing many tourism-related services, such as public safety, parks and roads.

Mayor Victorino said that while the TAT will be used in these areas, it will also be used for emergency services provided to visitors through Ocean Safety and the fire department.

“In fact, today I met with the new chief and the new deputy chief just to discuss these issues,” said Mayor Victorino. “I assured them that we will do our best to make sure they have the proper funding for future needs and that our fire department will be world class in the way they can operate.”


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