Mayor could search enhance on resort room tax | Information, Sports activities, Jobs

The Hyatt Regency Maui Resort and Spa in Kaanapali is pictured in February. State lawmakers passed a measure that would allow counties to deduct temporary lodging tax revenue from hotels and other accommodations, but could increase the current 10.25 percent tax rate by up to 3 percent. As the bill awaits governor’s signature, Mayor Michael Victorino is considering raising the bill to make up for funds Maui County is likely to lose. – Photo by Maui News / COLLEEN UECHI

With Maui County potentially losing $ 23.5 million in state hotel room tax revenue annually, Mayor Michael Victorino may request an additional surcharge to make up for the lost funds.

Victorino announced its intentions Tuesday when state lawmakers approved a measure to remove temporary tax revenue from housing from the counties, but which would allow them to add an additional surcharge of up to 3 percent on the existing rate of 10 To raise 25 percent.

House Bill 862 is now awaiting approval from Governor David Ige. A spokeswoman did not immediately respond to a question about Ige’s intentions for the bill on Friday afternoon.

Victorino said he disagreed with the legislature’s decision and said Tuesday he was considering the tax hike.

“I would like 1 percent to go to developing affordable and accessible housing for workers, 1 percent to rescue services, including sea, land and air rescue, and 1 percent to fund visitor education and cultural restoration across the board County of Maui. “ he said in a statement.

The Maui Coast Hotel in Kihei is pictured in March. Mayor Michael Victorino is considering adding a surcharge to the current temporary lodging tax rate of 10.25 percent if the governor signs a bill that would deprive the counties of TAT revenue. – The photo by Maui News / MATTHEW THAYER

The temporary lodging tax – sometimes known as the hotel room tax or TAT – was levied on hotels and other accommodations that had guests staying for less than 180 days, and was split between the counties and the state to cover things like state parks as well as maintenance and servicing The Hawaiian Tourism Board fund marketing of hiking trails. The rest goes into the sovereign wealth fund.

Maui County’s stake in the TAT is approximately $ 23.5 million, according to state law.

“The loss of TAT funds is a blow as the counties provide services to millions of visitors each year, including police and fire protection, park and road maintenance, and garbage disposal.” Said Victorino. “A new tax surcharge for the county can help offset some of these costs.”

A county spokesman did not immediately respond on Friday to questions about how the surcharge would work or when it might take effect.

The Victorino announcement and the possibility of an additional surcharge did not go well with Mufi Hannemann, CEO and President of the Hawai’i Lodging & Tourism Association.

“We know that there are different opinions among the four mayors on HB 862. We had hoped that Mayor Victorino would have delayed any announcement regarding the adoption of a district surcharge, because if Governor Ige rejects this measure, every planned surcharge would have to be paid. Hannemann said in an email Friday afternoon.

He added that his organization’s position is clear “Now is not the time to raise the cost of doing business in Hawaii.”

He pointed out that the state is one of the most expensive places in the country and the state with the highest unemployment rate.

“An additional 3 percent surcharge would make Hawaii the state with the highest hotel taxes in the country. Flight ticket prices or pandemic-related costs are not taken into account. “ Hannemann added.

He said an increase in travel costs would turn away travelers and hurt small business economies.

“With Maui the most tourism-dependent county, it does not seem advisable to threaten the most reliable sector of its economy.” Hannemann said.

Victorino said Tuesday that he would be working with Maui County Council on the bid.

The chairman of the council, Alice Lee, said this on Friday morning “Number one, we need a firm commitment from the state that (income from the increased surcharge) will not be withdrawn from the counties or other funds that they have slowly but surely used for their purposes over time. ”

“Maui is one of the most popular tourist destinations in the world and generates a fair amount of this temporary lodging tax.” Added Lee.

Commenting on Victorino’s suggestions for using the additional revenue – housing, emergency services, and visitor education – Lee said: “There are three good options to start with.”

However, she is thinking of devoting 1.5 percent to affordable housing and infrastructure, and realizes that infrastructure is required to have the housing. Half a percent could be used for emergency rescues and the other 1 percent for visitor education and cultural restoration.

“We look forward to our conversation with the mayor. As for the Council, we may have other proposals for dividing the tax. “ She said.

Lee said she is also awaiting the details of how the tax collection will be done and assurances that the proceeds will come to the county on time.

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

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