HONOLULU — The tussle for Transient Accommodations Tax allocation is continuing. On Tuesday, the House of Representatives introduced amendments to Senate Bill 1183, which, if approved, would lower the counties’ appropriation of TAT from $93 million to $80. The difference
HONOLULU — The tussle for Transient Accommodations Tax allocation is continuing.
On Tuesday, the House of Representatives introduced amendments to Senate Bill 1183, which, if approved, would lower the counties’ appropriation of TAT from $93 million to $80. The difference will then go to help pay for to fund Honolulu’s rail transit project.
Currently, the counties get $103 million of TAT to share between them, but that was scheduled to go decrease to $93 million this Legislative session, said Rep. Jimmy Tokioka, D-15.
SB 1183 also seeks to increase hotel taxes from 9.25 percent to 12 percent over the next 10 years. Funds from the hike, expected to raise $1.3 billion by 2027, will help pay for the rail.
Mark Perriello, president of the Kauai Chamber of Commerce, said the chamber opposes the measure.
“It could lead to a decrease in tourist spending at local businesses,” he said.
On Tuesday, several amendments — including Floor Amendment No. 5, which proposes continuing a half-cent increase on the General Excise Tax for Oahu residents to pay for the rail and Floor Amendment No. 6, that would main the $103 million allocation of TAT — were discussed by the House of Representatives.
Rep. Nadine Nakamura, D-14, said she supported Floor Amendment No. 6.
“It’s the only amendment that restores county share of TAT. The counties do so much for our visitors. Not only do they rescue visitors from our beaches, they maintain parks and roads visitors ride on,” she said.
In addition to keeping the higher TAT allocation, the amendment, which was introduced by Henry Aquino, D-38, would also use Oahu’s share of TAT to pay for the rail.
It’s for that reason that Tokioka said he didn’t support the amendment.
“The city is going to take a $45 million cut. It’s not that easy to pick and choose who you’re going to hit,” he said. “People say to hit rich people and people with second homes, but it’s not that easy.”
That amendment was passed by the Legislature.
In 2014, the Legislature capped county appropriation of TAT funds to $103 million. Currently, Kauai gets $14.9 million in TAT revenue.
If passed, SB 1183 will give the County of Kauai 14.5 percent in TAT revenues, or $11.6 million, according to the bill. Hawaii County will receive 18.6 percent, the city and county of Honolulu will receive 44.1 percent and Maui County will receive 22.8 percent, according to the bill.
Marcus Oshiro, D-46, introduced Floor Amendment No. 5, which was not passed.
“I brought forth an amendment, it’s very elegant and straightforward. It continues half percent GET surcharge for next 10 years upon willing citizens on Oahu who have chosen to bear cost to build rail,” he said. “It has nothing to do with TAT, doesn’t raise it, no increase in real property tax.”
