Council mulls tax tiers for inns and resorts | Information, Sports activities, Jobs

The Marriott Maui Ocean Club in Kaanapali is pictured in August. Maui County Council is considering bill that would set property tax brackets for hotels and resorts. If the bill is passed, the rates will be set during the annual spring budget meeting. The Maui News / COLLEEN UECHI FotoHI

A Maui County Council committee is considering a bill that would create property tax rates for hotels and resorts, potentially creating the basis for higher taxes on more expensive properties.

Council vice-chair Keani Rawlins-Fernandez, author of the bill and chair of the Budget, Finance and Economic Development Committee, said the idea of ​​setting up stages came during the last budget meeting when some witnessed the issue of taxing smaller hotels addressed the same price as larger hotels.

The bill would only set a tiered system for the hotel and resort category, but not the prices set during the council’s annual budget review in the spring.

Rawlins-Fernandez postponed the move during a budget committee meeting on Wednesday for more information from the administration.

Currently, the hotel and resort category has the second highest rates in the county, with rates set at $ 11.75 per $ 1,000 net taxable assessment for fiscal year 2022. The timeshare category is the highest taxed at $ 14.60.

A Maui County Council committee is considering a bill that would create property tax tiers for hotels and resorts, potentially allowing the county to charge higher rates for higher-value properties. Hotel values ​​can vary widely, with the Grand Wailea (pictured in June 2020) valued at an estimated $ 391 million on the high end and other hotels valued at $ 2-3 million. The Maui News / MATTHEW THAYER Photo

Rod Antone, executive director of the Maui Hotel & Lodging Association and one of two witnesses to the bill, said Wednesday that the county is already seeing different values ​​of hotels and resorts based on the size and value of their property.

“Creating a tiered system for hotels and resorts is unnecessary and somewhat punitive, especially so soon after the pandemic only stopped tourism for the state a year ago.” he said.

Antone, who is also an industry lobbyist, pointed to the state legislature’s recent decision to take millions away from Maui County’s share of the temporary lodging tax, forcing the district to collect its own lodging tax of up to 3 percent. Antone named it “too much too early.”

He said the surge in tourists to Maui is temporary and urged councilors to wait for international travel to reopen, which is likely to result in a decrease in visitors and large planes to Maui.

Maui Meadows resident Tom Croly took no position on the bill, but noted that hotels are valued differently than real estate like houses, and that some hotels may have units that are defined as condominiums rather than part of the larger hotel are.

Councilor Tamara Paltin, who is resident in West Maui, named the step establishment step just one more “Tools in the tool box.” She and other council members also said there had been a roughly 20 percent reduced rating for hotels and resorts over the past year.

Gery Madriaga, the county property tax clerk, noted at the meeting that hotel values ​​can vary widely, with the total value of the Grand Wailea being in the upper end of the range at $ 391 million and some hotels in the $ 2 to 3 million range -Dollars are lower end.

Some hotels have units that are condominiums, and if so, tiered pricing may not be able to generate the kind of tax revenue councilors are looking for, Madriaga explained. These condominiums are valued separately from each other and not under an entire hotel property.

When asked if hotels could split rooms into condominiums and pay less property taxes, Madriaga didn’t necessarily say, comparing condominiums to pieces of a cake that eventually add up.

Over the past few months, the council has considered several measures aimed at offsetting the impact of tourism on Maui County. On Wednesday, the Budget Committee elected members and reviewed the work of a temporary research group that will look at tourism management, economic development and diversification in the county.

The group is created in response to a bill proposed by Rawlins-Fernandez that would maintain the number of current tourist accommodations on Maui until the council passes legislation to implement the group’s recommendations, or in two years, whichever occurs earlier.

The bill has been referred to the Maui Planning Commission and will be heard by the council after being reviewed by the commission.

Rawlins-Fernandez said she would set up the group quickly to move the process forward and that it probably wouldn’t take two years for the council to implement the laws.

She becomes chair of the investigation team, Lee becomes vice-chair, and Paltin and Shane Sinenci are members.

* Melissa Tanji can be reached at mtanji@mauinews.com.