Counties are in different stages of creating their own hotel room tax increases

Hawaii’s four counties are in different stages of approving their temporary accommodation tax increases to compensate for lost revenue after the state ceased to allocate its statewide tax .

For many years, the state distributed to counties part of the revenue it collected from the 10.25% tax on stays in hotel rooms and other short-term rentals, but it stopped paying it. to do when the coronavirus pandemic has cut its budget.

State lawmakers then passed legislation repealing the county allocation and instead gave counties the power to levy their own transitional accommodation tax up to 3% – in addition to the 10.25%.

The state attorney general’s office said the state tax office does not have the authority to collect taxes for individual counties, so counties are now responsible for collecting the revenue themselves. .

Kauaʻi County Council recently passed a bill adding a 3% surcharge to hotel tax. Mayor Derek Kawakami enacted it so that the county can start collecting revenue on November 1. The other counties are not far behind.

Honolulu City Council Chairman Tommy Waters said the council must hold the first vote on its hotel room tax bill at the Oct. 6 meeting to get it passed before the end of the year.

The full city council only meets once a month and the bill must be voted on three times before it can be sent to Honolulu mayor Rick Blangiardi for signature. Waters said it would take help from other city leaders to meet the Dec.31 deadline.

“So I owe the mayor a phone call today just to make sure he’s okay with this. And I might need his help getting some votes from the council members who may have. a little afraid to do it. The sun law forbids me to go out there, whip the votes myself, so I have to rely on the mayor to go there and support the bill ”, a- he declared.

Waters said the funds would help the city offset the $ 44 million it received from the state, its share of the TAT.

“So here we go – $ 44 million we use to fix our roads, our sewers, our parks, pick up trash, our rescuers, the police, fires, storm water and streams,” he said. -he declares.

Maui County also passed a first reading TAT measure just over a week ago. The Hawai’i County Deputy Director of Finance said he was studying his plan and would likely follow other counties using 89-day temp hires to recruit as needed.

This interview aired on The Conversation on September 28, 2021.


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