Bill Text: HI SB382 | 2019 | Regular Session | Amended


Bill Title: Relating To Taxation.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Engrossed) 2019-03-07 - Referred to TIA, FIN, referral sheet 27 [SB382 Detail]

Download: Hawaii-2019-SB382-Amended.html

THE SENATE

S.B. NO.

382

THIRTIETH LEGISLATURE, 2019

S.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that the tax formula for levying taxes on time share units has not been adjusted since the State began taxing time shares in 1998.  When the legislature first enacted the tax formula on time shares, the legislature sought to create tax equity between the hotel and time share markets.  Accordingly, the existing tax formula for time shares is based on the "fair market rental value" of the time share unit.  Unfortunately, the existing tax formula for time shares significantly underestimates the fair market rental value of many time share units, particularly those units that are not rented on the open market, and therefore often fails to assess taxes at a fair and proper rate.  Consequently, the legislature finds that the formula for calculating the amount of tax owed by time share owners should be updated to better reflect economic and industry changes that have occurred in the more than two decades since the legislature first established the initial time share tax formula.

     The purpose of this Act is to update the formula for the amount of tax collected from time shares by increasing the base upon which a time share is taxed from one-half of the gross daily maintenance fees paid by the owner of the time share unit to an amount equal to all of those fees.

     SECTION 2.  Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "fair market rental value" to read as follows:

     ""Fair market rental value" means an amount equal to [one-half of] the gross daily maintenance fees that are paid by the owner and are attributable to the time share unit located in Hawaii.  Gross daily maintenance fees include maintenance costs, operational costs, insurance, repair costs, administrative costs, taxes, other than transient accommodations taxes, resort fees, and other costs including payments required for reserves or sinking funds.  Amounts paid for optional goods and services such as food and beverage services or beach chair or umbrella rentals shall be excluded from fair market rental value."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on January 1, 2020.



 

Report Title:

Transient Accommodations Tax; Time Shares; Tax Base

 

Description:

Amends the formula for the amount of transient accommodations tax to be collected from time shares by increasing the base on which time share occupancy is taxed from one-half of the gross daily maintenance fees paid by the owner and attributable to the time share unit to an amount equal to all of those fees.  Effective 1/1/2020.  (SD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

 

 

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