ARDA and ARDA-ROC Are Monitoring Legislation Proposing Transient Accommodations Tax (TAT) Increase

2015-03-24

Issue Brief

 A proposal was introduced in the Hawaii State Legislature, HB 169, to amend the definition of fair market rental value for timeshare rentals and to increase the transient accommodations tax (TAT) imposed on Hawaii-based timeshare units by 1% each year to gradually achieve a rate of 9.25%. The purpose of the legislation is to bring the TAT rate currently applied to timeshare in line with the tax rate applied to hotel guests for transient stays (e.g. hotel rentals).

Impact

 “Fair market rental value” means an amount equal to one-half the gross daily maintenance fees that are paid by the owner, are attributable to the time share unit, and include maintenance costs, operational costs, insurance, repair costs, administrative costs, taxes other than transient accommodations taxes, and other costs including payments required for reserves or sinking funds. This amended definition provides better clarity to timeshare owners.

If passed, timeshare occupants will see a slight increase for their stay beginning July 2015 with a one-percent increase (from 7.25 to 8.25 percent), and another one percent increase the following year to 9.25 percent in July 2016.
 

Position/Call to Action

 ARDA does not oppose the bill, but is continuing to monitor its progress to ensure no other provisions are attached to the legislation.

Issue Updates

 This proposal was introduced in the House in January 2015.
 

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