HI House Finance Committee Passes Timeshare Owner Tax (Again)

2011-04-03

Issue Brief

After seeing the House of Representatives pass a 27.5% increase in transient accommodation taxes paid by timeshare owners, the Hawaii State Senate had seemingly stopped the measure by electing not hear the bill in committee.  However, the House Finance Committee, who had already passed the tax by a vote of 14-1, introduced and passed an amendment to SB 1186 (SB 1186 HD1)  to include the timeshare tax increase in an attempt to force the Senate to pass the measure.

Impact

Although this tax will not directly affect timeshare developers, if this tax is passed, it would increase the current rate used to calculate the annual tax paid by timeshare owners of 7.25% to a new rate of 9.25% which would stay in effect through June of 2015.  This means the tax an owner would pay on a $1,000 maintenance fee would increase from $36.25 to $46.25--a 27.5% increase.

Position/Call to Action

Testimony was submitted by ARDA-ROC, ARDA-Hawaii, and several ARDA-Hawaii member companies pointing out the fundamental flaws in this tax and the negative effect it would have on timeshare owners and industry alike.  ARDA-ROC continues to oppose this measure and has already started its lobbying efforts with Senate leadership to build support for opposition to this bill.  Also, ARDA-ROC continues to assess the need for timeshare owners to be heard on this issue, and if and when the time comes where this bill is assigned to a conference committee (please see below regarding the bill's next procedural steps), ARDA-ROC will make sure to let you know how you can contact those legislators to voice your opinion on this issue.

Issue Updates

As expected, on April 4th, 2011, the House Finance Committee passed SB 1186 HD1 by a vote of 14-1 which included a 27.5% increase in taxes paid by timeshare owners.  The next step is for the bill to be heard on floor of the House of Representatives.  Assuming it passes the House, the bill will then be sent to the Senate where the measure will be assigned to a conference committee for consideration.  The purpose of the conference committee is to reconcile the differences between the House approved version of SB 1186 and the Senate approved version of SB 1186, as the two are not identical.  Generally speaking, a conference committee consists of two House members and two Senate members.  Please check back to www.ardaroc.org for updates and if you have not done so already, please sign up for legislative email alerts by clicking here.

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