MANDATORY RESORT FEES - A TOOL FOR TAX EVASION?

Tax evasion: Hawaiian hotels and resorts style?

From E Turbo News Jan 08, 2014 (excerpt)

Are the most-known resorts on the tourism and holiday islands of Hawaii part of a major tax evasion scheme? Popular hotel brands that are charging exorbitant resort fees include Hilton, Starwood, Hyatt, Turtle Bay Resort, among others.

Mallory Fujitani, spokesperson for the Hawaii Department of Taxation, confirmed via an exclusive correspondence with eTN today that “resort fees by hotels are subject to the Transient Accommodation Tax (TAT).”

According to Hawaii’s Dept. of Taxation, all participating resorts in Hawaii tax this mandatory nightly accommodation fee at the General Excise Tax rate of 4.712%, but do not add the required 9.25% Transient Accommodation Tax , that must be charged on room nights.

Ms. Fujitani, however, could not say if the Compliance Department at the State Tax Department is going to pursue legal actions against the offending resorts to collect these outstanding taxes.

A bill, titled SB 1201, was introduced on January 23, 2013 to the House and Senate and passed over to the 2014 legislator session to "clarify the department's position." Until SB 1201 is passed, an "enforcement to collect TAT on resort fees is unlikely."

Ms. Fujitani added that the purpose of the SB 1201 Bill "was to clarify this situation."

The Department of Taxation said it strongly supported this bill....

read ... Tax Hike Coming?

LINK: SB1201