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Council urges state legislators to increase TAT revenue to counties

By Staff | Apr 17, 2014

“Restoring the counties’ share of the TAT is a vote for maintaining a healthy visitor industry across the state,” said Maui County Councilman Mike White.

WAILUKU – The Maui County Council recently adopted Resolution 14-45, urging the state legislature to pass House Bill 1671 to increase transient accommodations tax (TAT) revenue to the counties, Councilman Mike White announced.

HB 1671 proposes to remove the current cap on the counties’ TAT share, which was established in 2011 as a temporary measure to help the state government recover from the economic downturn.

The TAT is a tax collected when a guest stays in a hotel or other accommodation for less than 180 days.

“A majority of visitor needs are addressed by the counties, not the state,” said White, who introduced the resolution. “It is the counties that provide services such as water and sewer, police and fire protection, road improvement and park development and maintenance – all of which are used to provide visitors with a quality experience.”

According to the resolution, the state’s annual tax revenues have increased more than $1.6 billion, or 32 percent, since 2009.

The resolution also notes that during the same period, revenues from the Neighbor Island counties were behind, with Kauai County’s revenues down 20 percent, Maui County’s down 4 percent and Hawaii County’s down 14 percent. City and County of Honolulu’s revenues were up only 0.6 percent in the period.

Councilman Michael P. Victorino, who testified at a Senate committee hearing last month in support of the measure, shared his disappointment with the state administration’s opposition to HB 1671 thus far.

He said some administration officials erroneously view the measure as a potential loss, rather than a promised investment in the counties.

Councilman Donald G. Couch Jr. spoke in favor of the resolution and called attention to a provision stating that “the State and counties serve the same constituents, and the governments should work together to reduce the burden being placed on residents “

“We counties are the State of Hawaii,” Council Chair Gladys C. Baisa said. “We have worked extremely hard to urge passage of this measure, and we will be watching its progress to ensure we bring home the bacon.”

In its original form, HB 1671 would reinstate the prior state policy of returning 44.8 percent of TAT revenues to the counties. According to estimates, if the TAT cap is removed, the counties would proportionally share approximately $165 million in annual TAT revenue – about $72 million more of the current capped value of $93 million.

White urges members of the public to support HB 1671 in its original form by e-mailing all state senators at sens@capitol.hawaii.gov and state representatives at reps@capitol.hawaii.gov.