Mayor Michael Victorino to Pursue TAT Tax to Help Mitigate Tourism Impacts to Maui County

News Release from County of Maui, April 27, 2021

Earlier this week, state legislators approved a measure that would take Transient Accommodations Tax (TAT) revenues away from Counties, but allow them to make up for lost funding with an additional tax surcharge of up to 3% to be added to the existing 10.25% rate charged by the state of Hawaii. Maui County Mayor Michael Victorino does not support the state’s decision, but he is considering the probable new revenue stream as a way to help mitigate some the financial impacts of tourism. 

“I’d like to see 1% go toward the development of affordable and attainable workforce housing, 1% for emergency services including ocean, land and air rescues, and 1% to fund visitor education and cultural restoration throughout Maui County,” explained the mayor. “The loss of TAT funding is a blow, especially since the counties provide services for millions of visitors each year including police and fire protection, parks and road maintenance, and waste disposal. A new County tax surcharge can help to offset some of these costs. I look forward to working with the Maui County Council on this initiative.”

If enacted, the new 3% Maui County TAT tax surcharge would be levied on all stays at hotel rooms, licensed vacation rental units and other short-term accommodations. The mayor believes the surcharge will serve as an incentive for Maui County to crack down on the growing number of illegal vacation rentals that don’t pay TAT. 

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Kauai Mayor: ‘County Needs TAT Hike’

HNN: … Hawaii County Mayor Mitch Roth says the tax hike would deter tourists from visiting and affect local families.

“We’re going to add another tax to our tourists and actually that’s a gamble whether the tourists are going to come back,” Roth said.

“There’s a lot of people, especially in the hospitality industry, and a lot of people who have already been struggling. Are we going to ask them to struggle more? Are we going to gamble with their livelihoods and friends, their family’s livelihoods by putting this bill into effect?”

Kauai County’s mayor said his county needs that revenue.

“The county needs TAT revenue to balance our budget and provide critical services to both our residents and visitors — such as police, fire and ocean rescues,” said Mayor Derek Kawakami.

“We look forward to working with our state and county partners to determine the best way for our county to get our share of TAT.”

read … Counties eye increases to hotel room tax as state seeks to divert some revenues to general fund

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New County Hotel Tax Is Approved In Final Vote

CB: … Hotel industry representatives staged a last-minute lobbying push in an effort to block House Bill 862, which would authorize the counties to impose a new hotel room tax of up to 3%.

The bill would also allow the state to seize $103 million in transient accommodations — that is, hotel room taxes — currently distributed to the counties, and would reduce funding for the Hawaii Tourism Authority.

The hotels’ lobbying push was ultimately unsuccessful as the House approved the measure 45-6 while the Senate approved it on a 23-2 vote.

House Finance Committee Chairwoman Sylvia Luke said the House was determined to “hold HTA accountable, and to set a vision for HTA which was not specifically industry-driven, but really was state-driven.”

She cited what she described as a disturbing trend in recent years when visitor spending did not grow nearly as rapidly as visitor arrivals, which peaked in 2019 at more than 10 million.

If the counties actually impose the new 3% hotel room tax increase, that would increase the hotel and transient vacation rental tax from 10.25% today to 13.23%.

Lawmakers also voted Tuesday to increase the rental car surcharge from $5 per day to $8 per day in a series of steps over the next six years, and gave the state Department of Land and Natural Resources more flexibility to set or raise fees for the use of state parks.

“This is all part of the big plan — how do you have tourists pay for their fair share of using natural resources in the state of Hawaii?” Luke said.

HB 862 would also reduce funding for the Hawaii Tourism Authority from $79 million down to $60 million, and would reduce funding for the Hawaii Convention Center from $16 million down to $11 million.….

The potential increase of 3 percentage points in the hotel room tax amounts to almost a 30% bump in the overall transient accommodation tax rate, which is “ridiculous,” Vieira said. He predicted it will drive visitor traffic to cheaper, illegal vacation rentals that don’t pay the tax.

“I just think legislators are being greedy, and taking the easy route, and like always, it’s ‘screw the visitor’ — always,” Vieira said….

read … New County Hotel Tax Is Approved In Final Vote

SA: Maui County plans 30% rise in visitor tax if Gov. David Ige signs bill