Hawaii Timeshare Tax Bill Passed Out of Committee March 8, 2011
Posted by John Stephens in : ARDA, Hawaii timeshare, News & Events , add a commentIf you’ve been reading this blog for the last couple of months, you know that we’ve been following a legislative issue in Hawaii regarding a potential tax increase for Hawaii timeshare owners.
According to the American Resort Development Association’s Resort Owners’ Coalition (ARDA-ROC), legislation has been introduced in the state House of Representatives and the state Senate which would increase the accommodation tax rate from 7.25% to 9.25% and increase the amount subject to the tax from 50% to 150% of the daily maintenance fee.
The House version of the legislation, HB809, was recently passed out of the Tourism Committee on a 9-0 vote, with the unanimous vote troubling considering the controversial nature of tax issues in the current economic climate.
I understand that many times these bills don’t even get to the voting stage unless the committee chairman knows he or she has the votes needed to pass, which is often why the votes are unanimous. All of the real wheeling and dealing has already been done behind closed doors by the time the bill comes up for “debate” in committee.
However, this issue is not clear cut by any means.
This vote seems to be more of a “pass the buck” procedure, which can happen if legislators feel that the bill could be voted down in another committee. That chance should come up in the next few days as the House Finance Committee is next on the hit parade to take up the measure.
Industry leaders are against the bill, which Governor Neil Abercrombie called for to help close the estimated $700million state budget deficit. In a recent meeting called by Rep. Tom Brower, Mufi Hannemann, Hawaii Hotel and Lodging Association president, said the Legislature needs to approach the issue carefully because Hawaii is positioned well with the timeshare industry and timeshare is a significant growth opportunity for the state.
“We’re very concerned about this initiative,” Hannemann said.
Lowell Kalapa of the Tax Foundation of Hawaii also sounded alarm bells, saying that timeshare and multi-use resorts are currently the only developments able to get financing for new construction or renovation projects. Kalapa said that “(timeshare) adds to the stability of the market in a time of crisis,” adding that timeshare owners maintained their visits to Hawaii much more than other tourists in the aftermath of the September 11, 2001 terrorist attacks.
“I would think in a down economy the last thing you want to do is raise taxes,” said Kalapa.
Which is exactly the same message that business leaders across various industries have been saying to elected officials throughout the country for the past two years. Let’s hope that the members of the Finance Committee can look to common sense and give timeshare owners a break from any tax hikes.
The debate hasn’t affected demand for Hawaii timeshare, as offers continue to pour in from people looking to buy and rent Hawaii timeshare. There are outstanding deals available on the BuyaTimeshare.com website and you can click here for more information.