Council implements a transient accommodations tax for the County of Maui

Press Release from:Keani N.W. Rawlins-Fernandez, Vice-Chair Maui County Council, October 1, 2021

KAUNAKAKAI, Hawaiʻi—The Maui County Council passed Bill 101 by a 7-0 vote today to create a 3 percent transient accommodations tax, also known as “TAT,” Council Vice-Chair Keani N.W. Rawlins-Fernandez announced today.

“On July 6, the state legislature opened the door for counties to collect our own TAT when they overrode the governor’s veto to enact Act 1 of the First Special Session of 2021,” said Rawlins Fernandez, who chairs the council’s Budget, Finance and Economic Development Committee. “Today, we walked through that door and exercised our right to collect county TAT in lieu of the state-collected TAT we were stripped of and hadn’t received since the beginning of the pandemic.”

Bill 101 (2021), Draft 1, establishes a 3 percent county transient accommodations tax on all gross rental, gross rental proceeds and fair market rental value considered taxable under the definitions of Section 237D-1, Hawaiʻi Revised Statutes.

The state TAT was established in 1987, and in 1990 about 90 percent of the revenue was allocated to the counties. But the state repeatedly lowered the rate of distribution over the ensuing decades. The counties received less than 15 percent in fiscal year 2019.

The council today established a Nov. 1 effective date for the county TAT. County officials estimate the new tax will generate about $15 million in the current fiscal year.

“Each of Hawaiʻi’s four counties are working on legislation to create their own transient accommodations taxes,” Rawlins-Fernandez said. “We all recognize how vital this tax can be to helping us address the impacts of tourism and improve quality of life for our residents.”

In anticipation of the new tax, the council also passed on first reading today a bill to increase anticipated revenue for the Open Space, Natural Resources, Cultural Resources and Scenic View Preservation Fund, Affordable Housing Fund and Economic Development and Cultural Programs Revolving Fund.

Rawlins-Fernandez noted the county bears the burden of providing many tourism-related services, as public safety, parks and roads.

“Putting additional revenue into these funds will help ensure we are allocating the county’s money to best serve the needs of our local communities,” said Rawlins-Fernandez, who holds the council seat for the Molokai residency area.

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