# [Hawaii Gov.] Abercrombie [wants] to raise TAT for timeshare owners



## jestme (Jan 25, 2011)

http://www.staradvertiser.com/news/20110125_New_priorities_new_taxes.html


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## Clemson Fan (Jan 25, 2011)

*Get ready for a tax increase on Hawaii Timeshares*

Our newly elected governor just proposed a tax increase on timeshares in his state of the state address.

http://www.staradvertiser.com/news/20110125_New_priorities_new_taxes.html

This is a one party state with over 85% of the state house and senate controlled by the same party as the governor.  So, I expect that this new tax increase on timeshares WILL happen.


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## dougp26364 (Jan 25, 2011)

Glad I don't own in Hawaii but, I'm also worried that timeshare owners are a likely non-voting target for other states in need of a group to tax. People who have no vote are always the easiest target. That can put a bullseye on timeshare owners across the nation or around the world. 

I'm puzzled at why a state so dependent upon tourism believes the taxing an industry built on bringing tourist dollars into the state is a good place to gouge? The economy is already pushing defaults to unprecedented levels. At least I assume this due to the drastic increases I've seen in bad debt expense funding for the MF's on timeshares we own. Putting a further burden on tourists who've bought into the state of Hawaii could put more pressure on timeshare HOA's in Hawaii and even push some developements past the breaking point.


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## Dave*H (Jan 25, 2011)

They've increased the hotel tax and now are increasing TAT.  [Political statement deleted - DeniseM Moderator]


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## Ken555 (Jan 25, 2011)

This is yet another short-sighted governmental decision which, while likely not to dramatically affect tourism revenue in the State, certainly won't encourage existing or prospective timeshare owners from spending more money for additional weeks.


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## Kona Lovers (Jan 25, 2011)

I wonder if this information will be included in timeshare presentations in Hawaii! :hysterical: :hysterical: :hysterical:


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## Kauai Kid (Jan 25, 2011)

I read in the Star where Hawaii is facing a several million $ deficit.

We do things bigger in Texas where the gov't deficit is projected at $27 billion.

Sterling


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## DeniseM (Jan 25, 2011)

Hawaii has made no bones about the fact that they prefer hotel guests to timeshare owners.


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## Kauai Kid (Jan 25, 2011)

DeniseM said:


> Hawaii has made no bones about the fact that they prefer hotel guests to timeshare owners.



Denise:  Is there any data showing how much hotel guests spend daily verses time share guests?

Mahalo,

Sterling


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## DeniseM (Jan 25, 2011)

Kauai Kid said:


> Denise:  Is there any data showing how much hotel guests spend daily verses time share guests?
> 
> Mahalo,
> 
> Sterling



I don't know where to find them, but I've seen reports from the Maui County Govt. that claim that hotel guests spend more.


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## UWSurfer (Jan 25, 2011)

If you read the article they are proposing to cut salaries and benefits from lots of folks & increase taxes in a number of areas, including a 50% increase  in the alcohol tax. 

Frame that up with what it notes on timeshares:

"THE GOVERNOR would increase the tax rate on time-share properties to mirror recent increases in the hotel room tax, bringing in about $30 million a year. He would shift about $10 million a year away from marketing and promotion at the Hawaii Tourism Authority to finance environmental protection, public facility improvements and culture and the arts."

I don't want more taxes as a timeshare owner...I DON'T!   But what was being proposed appears to be equitable bringing TS & hotel room taxes on par with each other.

It's a rough time for state and local governments across the country and the package of taxes and cuts sound quite familiar.


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## DeniseM (Jan 25, 2011)

Except, don't forget that timeshare owners are also paying high property taxes in Hawaii - especially on Maui.  (At a much higher rate than anyone else.)


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## Clemson Fan (Jan 25, 2011)

UWSurfer said:


> If you read the article they are proposing to cut salaries and benefits from lots of folks & increase taxes in a number of areas, including a 50% increase in the alcohol tax.
> 
> Frame that up with what it notes on timeshares:
> 
> ...


 
Per the US Census Bureau 2008 numbers, Hawaii has the highest number of state workers per 10000 population.  Hawaii has 581 state workers per 10000 in population.  The next highest state is Alaska at 424 per 10000.  The national average is 216 per 10000 placing Hawaii at about 2.5 times above the national average.

No political statement, just a statistical fact.


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## meatsss (Jan 29, 2011)

*TAT*

Just fininshed two weeks on Kauai at LBR. Paid about $92 just for the TAT for those two weeks. Per a column in the Star Advertise, many think only renters pay this tax and owners do not. I diabused them of that fact. Many residents seem to forget it was the timeshare owner that kept the tourism industry going after 9/11. The hotel occupancies dropped significantly, but not the timeshare resorts.


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## tomandrobin (Jan 31, 2011)

meatsss said:


> I diabused them of that fact. Many residents seem to forget it was the timeshare owner that kept the tourism industry going after 9/11. The hotel occupancies dropped significantly, but not the timeshare resorts.



Hence, Why they are targeting timeshare owners.


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## LisaRex (Jan 31, 2011)

They raise the taxes too high on hotel rooms, and the tourists will simply decide not to come.  They raise the taxes on timeshares, and we're stuck paying it unless we can find a buyer for our unit.

Oh, what a great system!


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## meatsss (Jan 31, 2011)

tomandrobin said:


> Hence, Why they are targeting timeshare owners.


Short memories.


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## Syed (Jan 31, 2011)

*My conversation with Maui Mayor Arakawa*

Last Friday I met with Mr Alan Arakawa and brought up the high property taxes and other taxes Maui timeshare owners are paying. The Mayor acknowledged tourism and timeshares are a very important part of Maui's economy. 
He said he is trying to encourage the movie industry to come to Maui and also is trying to encourage development of alternate energy sources, which will bring more money and consequently more tax revenues for Maui. He said legislators are looking for ways to find money to supplement their shorfall and are less apt to raise taxes on their own constituents. Hence the burden falls on non resident tax payers... tourists. He said alernatives to bringing more money to the island to balance the shortfall is what needs to be included in the discussion. He suggested working with the business community to get more involved and working with council members and his office to find ways to encourage more business to come to this island,so there will be other sources of revenue and then they will be less apt to raise taxes on timeshare vacationers. He said he is committed to the business community and he is open to listening to ideas. I was encouraged by his candidness and willingness to work with the business community.
As a resident,a voter and someone who is affected by timeshares on this island, I have started working on putting together information on what timeshare owners in pay in taxes( property, TAT, GE) and plan to meet with council members so the mil rate ( property tax rate) doesnt go any higher and hopefully meet with State legislators in the hopes other timeshare taxes dont keep going up.

In conclusion, the tax problems Hawaii is facing is not unique to this State; it is a nationwide problem. I know of other counties in the US where vacationers( hotel guests, vacation renters etc) are charged a high tax rate for their accomadations.


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## Kauai Kid (Jan 31, 2011)

I just completed my 2010 income taxes and always include the timeshare property taxes.

The property tax at the Point at Poipu for a 2 bedroom every year is $54.40/wk

The property tax at the Maui Schooner for a 2 bedroom every year is $117/wk

So Maui Schooner property tax is over twice as much as the Point and the Schooner definitely isn't as nice a property.

Sterling


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## jestme (Jan 31, 2011)

Syed said:


> In conclusion, the tax problems Hawaii is facing is not unique to this State; it is a nationwide problem. I know of other counties in the US where vacationers( hotel guests, vacation renters etc) are charged a high tax rate for their accomadations.



He is correct, they are not unique to Hawaii. However, he should note that taxing yourselves out of the travel market with other locations is not a good long term plan. Three years ago, we didn't have a TAT in Hawaii, now it will be almost 10%. Mexico, the Bahama's, and a large number of other tourist countries are MUCH cheaper to visit, many with brand new resorts, full meals and drinks included. It isn't a 6 or 9 hour flight to get to them either. Once Hawaii loses those customers, they will have a hard time getting them back. If he doesn't understand the worldwide travel economy yet, then perhaps a course in it would be in order.


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## dougp26364 (Jan 31, 2011)

Syed said:


> Last Friday I met with Mr Alan Arakawa and brought up the high property taxes and other taxes Maui timeshare owners are paying. The Mayor acknowledged tourism and timeshares are a very important part of Maui's economy.
> He said he is trying to encourage the movie industry to come to Maui and also is trying to encourage development of alternate energy sources, which will bring more money and consequently more tax revenues for Maui. *He said legislators are looking for ways to find money to supplement their shorfall and are less apt to raise taxes on their own constituents. Hence the burden falls on non resident tax payers... tourists.* He said alernatives to bringing more money to the island to balance the shortfall is what needs to be included in the discussion. He suggested working with the business community to get more involved and working with council members and his office to find ways to encourage more business to come to this island,so there will be other sources of revenue and then they will be less apt to raise taxes on timeshare vacationers. He said he is committed to the business community and he is open to listening to ideas. I was encouraged by his candidness and willingness to work with the business community.
> As a resident,a voter and someone who is affected by timeshares on this island, I have started working on putting together information on what timeshare owners in pay in taxes( property, TAT, GE) and plan to meet with council members so the mil rate ( property tax rate) doesnt go any higher and hopefully meet with State legislators in the hopes other timeshare taxes dont keep going up.
> 
> In conclusion, the tax problems Hawaii is facing is not unique to this State; it is a nationwide problem. I know of other counties in the US where vacationers( hotel guests, vacation renters etc) are charged a high tax rate for their accomadations.



That one statement I put in bold shows the problem with their thinking. Hawaii is a *tourism* dependant state. Chase the tourism dollars away by making Hawaii to expensive and you chase your own economy away. 

The better method would be to share the burden. Those that live there will not be able to shoulder the burden alone if tourism fails completely. 

Apparently, Hawaii thinks of itself as such an attractive place, anyone will want to vacation there at any price. All I can say is they better be right. If not, then those that live in Hawaii will be paying 100% of any funding shortfalls.

This holds true for *any* location dependant upon tourism be it Vegas, Orlando, Branson, Williamsburg or any other tourism heavy economy.


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## UWSurfer (Jan 31, 2011)

I keep thinking people haven't read the article:  http://www.staradvertiser.com/news/2...new_taxes.html

They are sharing the burden and spreading it out across many segments.   Again I'm not saying I like it, just that we're not the only ones being effected and in many respects are impacted in a very small way compared to the pensioners and others facing cuts there.


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## LisaRex (Feb 1, 2011)

UWSurfer said:


> I keep thinking people haven't read the article:  http://www.staradvertiser.com/news/2...new_taxes.html



Perhaps you didn't realize that Maui county created an entirely new classification of property ("timeshare") so that timeshare owners are ALREADY subjected to a tax rate that is 6 to 7 times more than what resident homeowners pay. (In addition to a higher tax rate, residents also enjoy a $300,000 exemption right off the top before they ever pay a penny in property taxes.) 

Timeshare owners' property tax rates are 65% higher than a hotel. 

Example: 

Take a piece of property valued at $2,000,000.  Here is what each of us would owe per year in property taxes:

Maui resident homeowner: $4250
A TS owner: $28,000   
A hotel guest: $17,000

*Real Estate Property Rates on Maui (per $1000 of valuation): *
Improved Residential  $5.00
Apartment $5.00
Commercial $6.25
Industrial $6.50
Agricultural $5.00
Conservation $5.00
Hotel and Resort $8.30
Unimproved Residential $6.25
*Homeowner $2.50*
*Time Share $14.00*
Commercialized Residential $4.00

Here's what I pay to Maui County for one week in my 1200 sq. foot villa in Maui, just in taxes:

Real Estate Taxes: $396.78
General Excise Tax: $62.68
North Beach West Maui Benefit Fund: $10.30
Occupancy Tax: $98
*Total: $567.76*

I'm all for spreading out the pain, but I fail to see why the person who stays there one week per year -- and bolsters their economy in the process by eating out, doing activities --  should subsidize the people who live there year round at such a disproportionate rate.


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## Syed (Feb 1, 2011)

Kauai Kid said:


> I just completed my 2010 income taxes and always include the timeshare property taxes.
> 
> The property tax at the Point at Poipu for a 2 bedroom every year is $54.40/wk
> 
> ...



 Maui timeshare property tax rate is higher than Kauai


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## Syed (Feb 1, 2011)

Thank you Kauaikid and LisaRex for your data. I will use the information for my quest with the Council members,the Mayor's office and State legislators.
I agree with many of you that Hawaii is not a business friendly State and sadly it is quite apparent the new Governor's office takes tourism for granted.  I think the State does not distinguish a hotel/condo vacationer from a timeshare owner; they are both sources of money.

I am fearful that if vacations keep getting more and more expensive, Hawaii will price itself out of the market. 
However, there are timeshare owners at the higher end properties like the 2 Westin Kaanapalis, Marriott Maui who dont seem to be as concerned about the tax hikes and will continue to come to Maui. Yes, some do complain but they still come because they like Maui.

Please continue to share your comments and tax information from your home resort to help me build my case here in Hawaii.

http://advantagevacation.com/blog/2...ng-for-new-sources-of-revenue-for-the-island/


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## LisaRex (Feb 1, 2011)

Here's a nice comparison of property tax rates for the different islands, per $1000 of valuation.  I assume that for islands that don't have a timeshare listing, the default would be hotel. 

http://www.tfhawaii.org/taxes/property.html


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## Emi (Feb 3, 2011)

I am on the board of one of the HGVC properties and just got off a conference call with the other HGVC boards, management and ARDA. ARDA is taking measures to proactively defeat this proposal. It will be devastating for the timeshare industry and owners should it be passed. It is not a small increase.

Per ARDA site..

"The tax bill would create a 400% increase on Hawaii timeshare owners, who are the only owners in the U.S. who pay such a tax.  For example, under current law, a timeshare owner with a $1000 maintenance fee pays a TAT of $36.20.  Under the new legislation, the TAT payment for the same owner would be $138.70.  For an owner with a $2,000 maintenance fee, the TAT would go from $72.50 to $277.50".

Currently, the timeshare tax is 50% of maintenance at a 7.25% rate. The proposal calls for 150% of maintenance at 9.25% rate. This is so out of line with any tax increase. Timeshares are paying more than their fair share of taxes. Hawaii timeshare owners should keep up to date on ARDAROC.com


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## jestme (Feb 3, 2011)

Emi said:


> .
> 
> Currently, the timeshare tax is 50% of maintenance at a 7.25% rate. The proposal calls for 150% of maintenance at 9.25% rate. This is so out of line with any tax increase. Timeshares are paying more than their fair share of taxes. Hawaii timeshare owners should keep up to date on ARDAROC.com



WOW! I was originally complaining about the increase from 7.25% to 9.25% (Over 25% in itself). I didn't realize there was a change on the base it was to be calculated on as well.


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## Kauai Kid (Feb 3, 2011)

The county and state will have to increase taxes a great deal before I'd stop going to Hawaii.

Airfare continuously increasing gives me the option of staying multiple weeks to decrease the airfare cost per week.  Unfortunately, for a lot of folks who aren't retired like I am, don't have that cost cutting option.

Sterling


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## Kauai Kid (Feb 3, 2011)

Lisa:  The real solution just popped into my head.

Why don't we both move to Hawaii?  I got word that one of the Alii Kai  condos sold for $69,000.  That is $69k for the whole year.


Sterling


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## tfalk (Feb 7, 2011)

Syed said:


> He suggested working with the business community to get more involved and working with council members and his office to find ways to encourage more business to come to this island,so there will be other sources of revenue and then they will be less apt to raise taxes on timeshare vacationers.



So, let me get this straight... we (TS owners) need to work to get more businesses there for them to tax so they can tax them instead of us?  Am I misreading this?  Isn't that his job instead of ours?  This sounds like a nice way to make his problem our problem...

I have the same problem with a rental property I own (not in Hawaii).  Since most of the area is rentals and they are second homes, the owners can't vote so we're easy targets for tax increases... besides, if we can afford a second home, we can afford to pay more taxes for services we aren't using, right?


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## siesta (Feb 7, 2011)

> Yes, some do complain but they still come because they like Maui.


 That is why the Governor feels Hawaii can get away with it.  "Sure they won't like it, but they will keep coming back."
This thinking is short-sighted, indeed.


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## tahoeJoe (Feb 8, 2011)

*Hawaii is alone - I think*



Syed said:


> In conclusion, the tax problems Hawaii is facing is not unique to this State; it is a nationwide problem. I know of other counties in the US where vacationers( hotel guests, vacation renters etc) are charged a high tax rate for their accomadations.



Correct me if I'm wrong, but isn't Hawaii the ONLY state where timeshare owners pay PROPERTY TAX and TAT?  

This is just wrong. Also, how do they figure the value of the week to calculate the TAT? Does a week in an oceanfront 1-bedroom Marriott or Westin TS cost more TAT than a week in 1-bedroom at a cheap flea-bag TS, 3 blocks Waikiki beach? 

I am seriously going to ask my HOA board to charge a "fee" to Hawaii residents who exchange into my mainland TS. This nonsense needs to stop. 

-TJ


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