Council unanimously approves 3% temporary lodging tax for County Maui

Maui County Council today unanimously passed Bill 101 – a bill that introduces a 3% temporary lodging tax.

“We didn’t want this bill, but the state legislature gave us no choice when they voted to take the county’s share of TAT’s revenue from the state budget,” said Mayor Victorino. “The county has spent a lot of money to provide services to our visitors with the proceeds from the TAT. This is one of the most important ways to finance these services. “

“We would also like to thank the District Council for delaying the start of the new tax collection until November 1st, to give both the hospitality industry and the district enough time to prepare,” said Mayor Victorino.

Council vice chairman Keani NW Rawlins-Fernandez noted that on July 6, the state legislature suspended the governor’s veto to pass Law 1, which opens the door for counties to their own TAT to raise.

“Today our county walked through that door and exercised our right to collect county TAT in lieu of the state-collected TAT that had been withdrawn from us and not received since the pandemic began,” said Rawlins-Fernandez.

District officials estimate the new tax at around $ 15 million for the current fiscal year, according to Rawlins-Fernandez.

Bill 101 (2021), Draft 1, establishes a 3% temporary lodging district tax on all gross rental income, gross rental income, and fair market rental value deemed to be taxable according to the definitions in Section 237D-1 of the Revised Hawaii Bylaws.

According to Rawlins-Fernandez, the state TAT was founded in 1987 and in 1990 about 90% of the revenue was distributed to the counties. “But the state has repeatedly reduced the distribution rate in the following decades. The districts received less than 15% in the 2019 financial year. “

“Each of the four Hawaiian counties are working on legislation to introduce their own temporary housing tax. We all know how important this tax can be in harnessing the visitor industry, managing the impact of tourism and improving the quality of life for all of our residents, ”she said.

“In anticipation of the new tax, the Council also passed a bill today at first reading to increase expected revenues for the Open Space, Natural Resource, Cultural Resource and Scenic View Preservation Fund, the Affordable Housing Fund and the Economic Development and Cultural Programs Revolving Find, ”said Rawlins-Fernandez.

“One thing I’m particularly looking forward to is a Hawaiian cultural center in each district. Bringing additional income into these funds will help us use the county’s money to best serve the needs of our local communities, ”she said.

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

Mayor Victorino said that while the TAT will be used in these areas, it will also be used for emergency services that are made available to visitors by Ocean Safety and the fire department.

“In fact, I met with the new boss and the new deputy boss today to discuss these matters,” said Mayor Victorino. “I have assured them that we will do our best to ensure that they are adequately funded for future needs and that our fire services will be world-class in the way they operate.”