Nightly taxes increasing in Hawaii?

[daviator]

Just came across this post: https://www.suitesandlobbies.com/hawaii-marches-toward-luxury-tourism-with-hotel-tax

Assuming it's true, I would bet this increase applies to timeshare accommodations too (since the taxes they are modifying already apply to us.) This will result in the huge nightly taxes in Hawaii becoming even more huge. We may be at $50/night in taxes for a two bedroom unit soon. Yikes!

 

[Dean]

Plus 11% on cruises as well.

 

[easyrider]

@letsgobobby did some good calculations on a recent thread. Below is what letsgobobby started with.

Bill
______________________________________________________________________________________________________

https://www.seattletimes.com/busine...otel-tax-to-help-it-cope-with-climate-change/

“The state’s existing 10.25% tax on daily room rates would climb to 11%. In addition, Hawaii’s counties each add their own 3% surcharge and the state and counties impose a combined 4.712% general excise tax on goods and services including hotel rooms. Together, that will make for a tax rate of nearly 19%.”

I believe this is not included in our MFs - this is the tax we pay when we stay in our timeshare.

 

[daviator]

Yes, they apply this tax and apparently base it on 50% of the maintenance fee equivalent for the stay. So with MFs for a two bedroom lockoff in Maui at $4000+, that means the occupancy taxes will be $380+ for seven nights, or a bit more than $54 per night. Even more for units with MFs that are higher than $4000.

Sorry I didn’t realize there was another thread talking about the increase, didn’t mean to duplicate one which already exists.

They really are trying to reduce the number of visitors by pricing out those who can’t afford all these extra taxes.

 

[dioxide45]

Yes, they apply this tax and apparently base it on 50% of the maintenance fee equivalent for the stay. So with MFs for a two bedroom lockoff in Maui at $4000+, that means the occupancy taxes will be $380+ for seven nights, or a bit more than $54 per night. Even more for units with MFs that are higher than $4000.

Sorry I didn’t realize there was another thread talking about the increase, didn’t mean to duplicate one which already exists.

They really are trying to reduce the number of visitors by pricing out those who can’t afford all these extra taxes.

I think the topic is worth discussing. There was another thread in the Hawaii forum but it became a mess and was closed.

 

[rickandcindy23]

Double taxation on timeshare owners has always been a problem for me.

What if all homeowners had to pay an occupancy tax on their homes, along with a property tax. We own a percentage of a property, why are we being double-taxed?

 

[dioxide45]

Double taxation on timeshare owners has always been a problem for me.

What if all homeowners had to pay an occupancy tax on their homes, along with a property tax. We own a percentage of a property, why are we being double-taxed?

And if you rent from an owner and the owner is properly collecting TAT/GET, the renter is paying double tax too. The article is about TAT, but owners pay that through TSO (Timeshare Occupancy Tax). If an owner is collecting TAT the renter is then paying this daily TSO. So renters can be paying double tax.

 

[rickandcindy23]

Wh

And if you rent from an owner and the owner is properly collecting TAT/GET, the renter is paying double tax too. The article is about TAT, but owners pay that through TSO (Timeshare Occupancy Tax). If an owner is collecting TAT the renter is then paying this daily TSO. So renters can be paying double tax.

When is your Hawaii trip? Be sure to eat at Captain Jack's on Maui at SOK and look at the beach erosion in front of the resort and the neighboring resorts/ apartments. It's astounding.

 

[lynne]

Double taxation on timeshare owners has always been a problem for me.

What if all homeowners had to pay an occupancy tax on their homes, along with a property tax. We own a percentage of a property, why are we being double-taxed?

Hawaii homeowners who do not live in their home for less than 180 consecutive days and rent their property are subject to the TAT. They pay both property taxes as well as TAT. Since the timeshare is not your permanent home, this would apply.

 

[daviator]

And if you rent from an owner and the owner is properly collecting TAT/GET, the renter is paying double tax too. The article is about TAT, but owners pay that through TSO (Timeshare Occupancy Tax). If an owner is collecting TAT the renter is then paying this daily TSO. So renters can be paying double tax.

Yes, it seems like with these extreme taxes, they should give up on assessing the taxes on owners, too, since they are indeed double taxation.

It seems like there could/should be a legal challenge to these occupancy taxes on owned properties, i.e. deeded timeshare weeks. It gets a bit murkier for points owners, who don't really OWN the properties at which they are staying. Probably those would be harder to challenge.

 

[daviator]

Hawaii homeowners who do not live in their home for less than 180 consecutive days and rent their property are subject to the TAT. They pay both property taxes as well as TAT. Since the timeshare is not your permanent home, this would apply.

They pay TAT for the nights their property is rented. I don't think (correct me if I'm wrong) that they have to pay TAT on the nights they self-occupy their own property! Do they?

 

[dioxide45]

Yes, it seems like with these extreme taxes, they should give up on assessing the taxes on owners, too, since they are indeed double taxation.

It seems like there could/should be a legal challenge to these occupancy taxes on owned properties, i.e. deeded timeshare weeks. It gets a bit murkier for points owners, who don't really OWN the properties at which they are staying. Probably those would be harder to challenge.

The HOA has lobbied against and had several lawsuits against Maui county related to tax assessments. From the states point of view, they see that hotels pay property tax and hotel guests pay TAT/GET on their room rate. They saw they were losing out on that TAT and GET on timeshare occupancy. Thus the timeshare occupancy tax (TSO). There was a proposal a few years ago to change the fair market value calculation for timeshare occupancy tax to be based on 100% of the maintenance fee. That would have effectively double the tax rate for owners and timeshare guests. Hawaii and Maui county governments (and most government) never found a tax they didn't like.

 

[lynne]

They pay TAT for the nights their property is rented. I don't think (correct me if I'm wrong) that they have to pay TAT on the nights they self-occupy their own property! Do they?

You are correct that owners do not pay TAT if they are residents of Hawaii and occupy their home for at least 180 days. If owners are not Hawaii residents, there is a different property tax than owners even if they are not renting their properties. If they do rent, they are assessed both GET and TAT on top of their property taxes for the rental period. Timeshare owners who do not live in the timeshare full time, are not considered Hawaii residents and the timeshare properties are short term rental properties. The TAT is assessed for any rental less than 180 days for any and all properties in the state.

 

[dvc_john]

Also, property tax rates for timeshares in Maui are by far the highest rate of any classification of property.

2024–2025 Maui Property Tax Rates by Classification​

Classification	Tier 1: Up to $1M	Tier 2: $1M–$3M	Tier 3: Over $3M
Owner-Occupied	$1.80	$2.00	$3.25
Non-Owner Occupied	$5.87	$8.50	$14.00
Apartment	$3.50	—	—
Hotel and Resort	$11.75	—	—
Time Share	$14.60	—	—
TVR-STRH (Short-Term Rental Home)	$12.50	$13.50	$15.00
Long-Term Rental	$3.00	$5.00	$8.00
Agricultural	$5.74	—	—
Conservation	$6.43	—	—
Commercial	$6.05	—	—
Industrial	$7.05	—	—
Commercialized Residential	$4.00	$5.00	$8.00

 

[dioxide45]

Also, property tax rates for timeshares in Maui are by far the highest rate of any classification of property.

2024–2025 Maui Property Tax Rates by Classification​

Classification	Tier 1: Up to $1M	Tier 2: $1M–$3M	Tier 3: Over $3M
Owner-Occupied	$1.80	$2.00	$3.25
Non-Owner Occupied	$5.87	$8.50	$14.00
Apartment	$3.50	—	—
Hotel and Resort	$11.75	—	—
Time Share	$14.60	—	—
TVR-STRH (Short-Term Rental Home)	$12.50	$13.50	$15.00
Long-Term Rental	$3.00	$5.00	$8.00
Agricultural	$5.74	—	—
Conservation	$6.43	—	—
Commercial	$6.05	—	—
Industrial	$7.05	—	—
Commercialized Residential	$4.00	$5.00	$8.00

So they already have a higher property taxation rate and then owners have to pay again just to occupy.

 

[daviator]

The HOA has lobbied against and had several lawsuits against Maui county related to tax assessments. From the states point of view, they see that hotels pay property tax and hotel guests pay TAT/GET on their room rate. They saw they were losing out on that TAT and GET on timeshare occupancy. Thus the timeshare occupancy tax (TSO). There was a proposal a few years ago to change the fair market value calculation for timeshare occupancy tax to be based on 100% of the maintenance fee. That would have effectively double the tax rate for owners and timeshare guests. Hawaii and Maui county governments (and most government) never found a tax they didn't like.

I do not believe there have been any lawsuits related to occupancy taxes on timeshares. The lawsuits you refer to have been related to property taxes. They are completely different, but also somewhat connected. Basically, when Maui County failed at their attempt (they lost in court multiple times) to place outlandish property taxes on timeshare owners, they went to plan B, which was the outlandish occupancy taxes. They view us as tourists to be exploited.

 

[rickandcindy23]

So they already have a higher property taxation rate and then owners have to pay again just to occupy.

Yes, that is the chart I saw a few years ago and tried to find. We pay $1,500 in property taxes on 3 weeks at Hono Koa. Don't know what we pay at Westin.

It's almost unbelievable what timeshare owners are paying in taxes to stay in their own weeks.

When is your Hawaii trip, Jeremy?

 

[dioxide45]

When is your Hawaii trip, Jeremy?

We don't go until next week. We had to delay our trip a few days due to a family emergency.

 

[jmhpsu93]

We don't go until next week. We had to delay our trip a few days due to a family emergency.

We'll be heading there next week as well...Ko'Olina and Waiohai. I thought I'd run into you in Florida. LOL

 

[dioxide45]

We'll be heading there next week as well...Ko'Olina and Waiohai. I thought I'd run into you in Florida. LOL

Well, our trip is 7 weeks long, so we still may not be in the same place at the same time...

 

[DanH]

Is this in effect now? I assume it was passed into law. Have any owners here had to pay the higher rate yet - will my trade to a Marriott Vacationclub resort result in another 350$ or more additional occupancy tax? I'm not a huge fan of HI and I prefer other beachy/sunny locations myself.

 

[Normita]

I recently rented somef units at Sheraton Kauai Resort in Koloa. Since they were rented using Abound points, Marriott took care of the reservations and sent me the guests' folios when they checked out.
When I rent, I make it clear that the Hawaii Transient Occupancy Tax is not included in the rental and that it is payable directly to the resort. However, I was really surprised to see that the resort billed the guests $20.52 per night for a studio, $24.95for a 1 BR and $44.95 for a 2 BR. That is almost double what we paid about 2 years ago in Honolulu.

 

[okwiater]

How much taxation will it take before it’s not worth visiting anymore?

 

[dioxide45]

Is this in effect now? I assume it was passed into law. Have any owners here had to pay the higher rate yet - will my trade to a Marriott Vacationclub resort result in another 350$ or more additional occupancy tax? I'm not a huge fan of HI and I prefer other beachy/sunny locations myself.

There is currently a 10.25% tax. The increase to 11% goes into effect January 1, 2026.

 

[Luanne]

How much taxation will it take before it’s not worth visiting anymore?

Probably varies by person. There are some even here that have said they won't visit any longer.