STAND. COM. REP. NO. 1177
RE: S.B. No. 382
Honorable Ronald D. Kouchi
President of the Senate
Thirtieth State Legislature
Regular Session of 2019
State of Hawaii
Your Committee on Ways and Means, to which was referred S.B. No. 382, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO TAXATION,"
begs leave to report as follows:
The purpose and intent of this measure is to adjust the formula for the transient accommodations tax imposed on time share units.
Specifically, the measure increases the fair market rental value base upon which a time share unit is taxed to an unspecified percentage of the gross daily maintenance fees paid by the unit owner and attributable to the unit.
Your Committee received written comments in opposition to this measure from American Resort Development Association--Hawaii and the Kohala Coast Resort Association.
Your Committee received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.
Your Committee finds that the formula for imposing the transient accommodations tax on time share units has not been updated since 1998, when the State began imposing the tax on those units. Your Committee believes that it is reasonable to update the formula to better reflect changes in the economy and the industry that have occurred since then, as this measure proposes.
Your Committee has amended this measure by:
(1) Establishing that the base upon which a time share unit is taxed shall be equal to the gross daily maintenance fees that are paid by the unit owner and are attributable to the unit; and
(2) Making technical nonsubstantive changes for purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 382, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 382, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
DONOVAN M. DELA CRUZ, Chair