HI House of Representatives Passes Omnibus TAT Bill

2011-04-14

Issue Brief

In an effort to find additional revenue to balance the state budget, on April 12th the Hawaii House of Representatives passed SB 1186 SD2 HD1 by a vote of 45-6.  This bill would establish a temporary minimum daily tax on all “complimentary” hotel and transient stays, temporarily limit the transient accommodations tax revenue that is provided to the counties, and provide for a 27.5% increase in transient accommodations taxes paid by timeshare owners.

Impact

If this measure becomes law, it would, among other things, 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

ARDA-ROC continues to oppose this measure and has already started its lobbying efforts with Senate leadership to ensure the timeshare tax provisions are not included in the final draft of SB 1186.

Issue Updates

Since this bill has been passed by the House and transmitted to the Senate, it will be assigned to a conference committee for consideration.  The purpose of the conference committee is to reconcile the differences between the final House approved version of SB 1186 (SB 1186 SD2 HD1) and the Senate approved version of SB 1186 (SB1186 SD2), as the two are not identical.  Generally speaking, a conference committee consists of two House members and two Senate members.  Once the conference committee members are announced, we will focus our efforts on those four individuals to persuade them to forgo tax increases on timeshare owners.

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