RES 545 Draft 01 2012-2014 - Laserfiche WebLink

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JUSTIFICATION SHEET PROPOSER: Hawai`i State Association of Counties TITLE: A Bill for an Act Relating to Transient Accommodations Tax PURPOSE: This proposed Bill for an Act restores the Counties' share of the Transient Accommodations Tax (TAT) revenue to 44.8 per cent. MEANS: Amends Section 237D-6.5 of the Hawai`i Revised Statutes (HRS) JUSTIFICATION: The Transient Accommodations Tax (TAT) is a tax levied on the proceeds derived from furnishing hotel rooms and other transient accommodations. In 1990, Act 185 was enacted by the Legislature to provide the Counties with a portion of the TAT revenue received, establishing a more equitable method of returning earned revenue back to the Counties. Act 103 (1998) then allocated 44.8 per cent of the TAT to the Counties. After the Legislature evaluated the State's fiscal condition in 2011, the Legislature decided to cap the Counties' share at $93,000,000. This greatly affected the Counties ability to receive TAT revenues, and based on the total amount of collections which has been increasing year after year. For the 2014 legislative session, the Counties strengthened their lobbying efforts to express the importance and need for receiving TAT funds for the purpose of supporting visitor related expenses such as public safety, road maintenance, transportation, etc. However, the Legislature amended the capped amount to $103,000,000 for Fiscal Year 2014-2015 and Fiscal Year 2015-2016 only. To continue the Counties efforts to lobby for additional TAT funds, this proposed Bill requests that the Counties allocation be restored back to 44.8 per cent of the total revenues collected from the TAT.