A confusing, misguided bill
Boy, talk about a misguided bill. House Bill 1586 was approved by the House Tourism Committee Tuesday and — at first glance — it makes absolutely no sense.
According to a story in Wednesday’s paper, the bill would phase out the counties’ share of the transient accommodations tax. The counties’ share of the revenue would drop in steps from the current $103 million to zero after 2020.
The sponsors — including Reps. Lynn DeCoite (Molokai-East Maui-Lanai) and Kyle Yamashita (Upcountry) — say the bill would protect the interests of residents. Yamashita explained:
“Our residents, especially low- and middle-income taxpayers, are paying too much income tax,” Yamashita said. “At the same time, nonresidents can buy homes in Hawaii, with the nation’s lowest property tax rates, and yet in most cases, they pay no income tax to the state. This has the effect of keeping the cost of buying a home out of the reach of many of Hawaii’s people and causing property valuation to continuously rise.”
All of that may be true, but what does any of that have to do with giving up the county’s share of the TAT? All of Hawaii’s counties experience very real costs because of the large numbers of visitors every year. The county share of the TAT is designed to offset some of that cost.
And what does the TAT have to do with income taxes or property taxes? If there is a problem with either of those, address it directly. Don’t go charging off in some cockamamie scheme that will hand over 100 percent of the TAT to state government.
Virtually every year, Hawaii’s counties have to fight to keep their share of TAT revenues. It is very disturbing that two Maui County legislators are part of the charge to defund the counties.
We repeat, the counties’ expenses associated with the visitor industry are very real. The TAT, as currently configured, helps offset those expenses.
And the transient accommodations tax has absolutely no impact — none — on income or property taxes.
* Editorials reflect the opinion of the publisher.