MEDIA RELEASE

Kauaʻi, Maui and Hawaiʻi Island to benefit from larger share of Hotel Room Tax

Honolulu, Hawaiʻi – The House Finance Committee today passed Senate Bill 648 SD1 HD1, which will increase the amount of the Transient Accommodations Tax (TAT) revenues for the neighbor islands.

The amended bill provides an additional $36 million to support projects essential for neighbor island residents including:

• Increasing Kaua‘i’s TAT revenues from $14,935,000 to $24,360,000.
• Increasing Maui’s TAT revenues from $23,484,000 to $38,304,000.
• Increasing Hawai‘i Island’s TAT revenues from $19,158,000 to $31,248,000.

The TAT amount for the City & County of Honolulu is unchanged for a total of $45.4 million per year.

During the 2017 Special Legislative Session, lawmakers voted to raise the TAT by 1 percent to immediately address the shortfall of OÊ»ahu’s rail project. At that time House leaders discussed the possibility of revisiting proposals to increase TAT revenues for the neighbor islands.

The TAT is paid by hotel guests to the State and allocated to several groups, including the counties, to pay for visitor released expenses.

House Speaker Scott K. Saiki credited neighbor island Representatives with working to find ways to provide more funding for the neighbor islands. Saiki said this bill is a product of their discussions.

“During the special session last summer, our neighbor island Representatives were concerned about the need to increase the counties’ share of the TAT,” said Saiki (McCully, Kāheka, KakaÊ»ako, Downtown). “This proposal will provide much needed financial support for the neighbor islands.”

Representative Mark M. Nakashima (Hāmākua, Hilo) said this will benefit Hawaiʻi Island residents because it provides additional funding by shifting costs to visitors with minimal impact on their spending.

“This additional revenue from the increased share of the TAT for the neighbor islands will help us deal with tourism impacts such as paying for police, firefighters, parks and other infrastructure, which also benefit residents,” said Nakashima.

Representative Joy San Buenaventura (Puna) said it was a team effort to pass this bill.

“I want to thank all my colleagues for working together and making the TAT more equitable,” said San Buenaventura.

The bill now moves on through the legislative process.