Who usually pays the taxes on an exchange?

[jazzfan]

I am doing my first private exchange and in HI, if someone other than the owner does not occupy the unit, an 11.416% occupancy tax applies to the going rate. In my case, the tax amount would be over $360 for the week. Who is usually responsible for the payment of the tax, the owner or the guest? I would think the owner is but just curious how others have handled this.

 

[Dave M]

Like almost everything else in the private transaction world, this would be a matter of negotiation between the parties.

As an owner, I would fully expect the guest to pay. Why should I pay an amount that I wouldn't have to pay if I simply occupied the unit?

On the other hand, as a guest, why should I pay to occupy this unit when the week I give in exchange allows free occupancy?

 

[Carolinian]

That is valuing the week at over $3,000 which seems excessive. I would ask them 11% of what?

 

[JeffV]

It really isn't too difficult to find weeks in Hawaii renting for over $3000 per week.

That is valuing the week at over $3,000 which seems excessive. I would ask them 11% of what?

 

[Carolinian]

It really isn't too difficult to find weeks in Hawaii renting for over $3000 per week.

I have seen some t/s weeks there for a lot less, and some Tuggers have asserted that there is a rental glut there.

 

[JeffV]

I guess it all depends on the resort involved.

I have seen some t/s weeks there for a lot less, and some Tuggers have asserted that there is a rental glut there.

 

[T_R_Oglodyte]

I have seen some t/s weeks there for a lot less, and some Tuggers have asserted that there is a rental glut there.

Any yet there are TUGgers who assert that they annually rent half of their 2-bedroom lockoff Hawaii unit for $1500 to $2000 - i.e., for more than the maintenance fee for their entire unit.

So does this cancel out your obervation? Or, is it more likely that there are mulitple markets within Hawaii, and that high end timeshares in high demand locations can command rentals exceeding $3000?

 

[Bee]

Is this tax charged by the resort? Unless they rent the week for you how would they know how much you rented it for?

Sandy

 

[rickandcindy23]

That is odd. Is this new, or am I just uninformed? Is this Marriott only?

I don't understand what you are saying. I have a guest that is using my unit on Maui this April. She is my guest, I reserved the unit for her. She is not going to have to pay anything, as far as I know, because the TAT is paid by me, within the regular MF's. Why would she have to pay money to stay there? I am starting to get a little worried.

 

[rickandcindy23]

Another thought....

We just exchanged into two Hawaii resorts this past May and paid nothing for sales tax. We just had to pay the TAT, which was only $20.00 per unit or something close to that.

If something has changed, I would love to know because I don't want my friends staying at my resort on the pretense of "no additional charges," if there are going to be taxes. That would be so embarrassing to me.

 

[#1 Cowboys Fan]

Pardon my ignorance, but what is "TAT"?

I've heard of "tit" for "tat"----but I'm assuming it's got nothing to do with a $20 fee for that!!

So, again, what is TAT?

Pat

 

[rickandcindy23]

A tax for Hawaii travlers.

Transient tax. We are transients. I had the wrong idea of the purpose for the tax. We are the indigents.

 

[luv_maui]

TAT or TOT

I'm not sure about TAT, but TOT stands for Transient Occupancy Tax, I think? It used to be $2.84/day at the Worldmark Kihei resort for a 2 bedroom. As a WM owner I would be charged this TOT as a special amount above my MF's since not all WM's have TOT. But, "TAT", I'm not sure about what that stands for.

 

[TravelSFO]

Google search for "Hawaii TAT"

http://www.hawaii.gov/tax/taxfacts/tf96-02.htm

I think the answer is in there ... somewhere.

 

[jazzfan]

I'm not sure what I'm saying either. A Marriott rep told me yesterday that if someone other than myself occupies my timeshare week, a state occupancy tax of 11.4% would apply to the room rate as if it was rented out. Since Marriott charges $459 a night at Ko Olina in the summer for a 2 bedroom unit, a seven day tax would be over $360. Another Marriott rep told me today that it would not apply. Therefore, I don't know what will happen.

 

[Bee]

I think you were misinformed. Unless this is something brand new. I've rented and allowed others to use my hawaii Marriott unit and Marriott never charged a tax other than the TAT.

 

[Jya-Ning]

I'm not sure what I'm saying either. A Marriott rep told me yesterday that if someone other than myself occupies my timeshare week, a state occupancy tax of 11.4% would apply to the room rate as if it was rented out. Since Marriott charges $459 a night at Ko Olina in the summer for a 2 bedroom unit, a seven day tax would be over $360. Another Marriott rep told me today that it would not apply. Therefore, I don't know what will happen.

Have you look at the item 9 provided by TravelSFO's link?

9. I am an owner of a time-share unit. When I use my unit, I do not have to pay any transient accommodations tax. If this time-share unit is rented to someone other than myself as one of the owners, is the rental income subject to the transient accommodations tax?
Yes. You will be subject to the transient accommodations tax if you rent your unit to someone for less than 180-consecutive days. It will not apply, however, if you exchange your time-share for an out-of-state time-share unit.

You are responsible for paying the tax if you rent it out. Usually you charge it to the renter. Since you are not supposed to rent out your exchanged unit, if you got an exchange and give a guest voucher, I will assume, you don't need proof. Otherwise, if you are the owner and did not use that week, you may better has proof that you don't receive any rent income.

Jya-Ning

 

[isisdave]

Item 9 in the above link seems to say that if you rent out a week you own you owe the tax. But the resort isn't going to collect it for you. And of course it would only be on the amount you rented it for, not on the amount the resort might have rented it to someone for.

I've never heard this brought up before, but I'll bet it's much more widespread than just Hawaii. For sure, most California jurisdictions have occupancy taxes, and I doubt they exempt timeshares.

 

[T_R_Oglodyte]

Item 9 in the above link seems to say that if you rent out a week you own you owe the tax. But the resort isn't going to collect it for you. And of course it would only be on the amount you rented it for, not on the amount the resort might have rented it to someone for.

I've never heard this brought up before, but I'll bet it's much more widespread than just Hawaii. For sure, most California jurisdictions have occupancy taxes, and I doubt they exempt timeshares.

Timeshare is an interesting situation re transient occupancy. Arguably, a timeshare owner is not a transient because they are occupying property they own. I don't pay transient taxes, but I do pay property tax just as any other condo owner pays property tax.

But if I rent my unit ....???

In any case, it's probably a bit like sales tax. Most, if not all, states that have sales tax also have a law that requires to declare and pay tax on any items they bring in from out of state. You can then offset against that any tax you paid in the locale where you bought the item.

Now, here in Washington (where we have sales tax), some folks are known to take a trip to Oregon (which as no sales tax) when they purchase certain big ticket items, such as computers, large screen TVs, etc. I don't think very many of those people fill remit the forms and money they are legally required to submit. I also think it very unlikely that the state is going to suddenly start going after Aunt Martha and Cousin Willy for failing to pay state sales tax on imported items.

I think the same is likely to occur with rimeshare owners renting their units. If the resort doesn't collect the tax, I don't think it's going to get collected at all.