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Home My WebLink AboutCOM 0449.019 2020-2022 P/coundd fI 81 Kohaki xCoast R i December 6, 2021 Maile Medeiros David, Chair Aaron Chung,Vice Chair Hawai'i County Council 25 Aupuni Street Hilo, HI 96720 { RE: Comments on Bill 81, Draft 2- Hawaii County Transient Accommodations Tax; 00 Resolution 263-21, Draft 2—HSAC Package; Resolution 276-21 -Finance Department TAT Clerks Dear Chair David,Vice Chair Chung and Members of the Hawaii County Council, Thank you for your deliberations to date on Bill 81, Draft 2 which amends Chapter 2 of the Hawaii County Code, by adding a new article to implement a Hawaii County Transient Accommodations Tax(TAT). While the Kohala Coast Resort Association (KCRA)was adamantly against the 'gut and replace'tactics used by the Hawaii State Legislature to strip the counties of their TAT,we have always been strong supporters of Hawaii County's efforts to receive its fair share of TAT collected by the state.We understand the impacts that visitors have on services provided by the county, know that the visitor industry directly supports position across critical sectors of both our state and local government,and also understand the vital role our industry plays in our state's overall economy. We would appreciate your consideration of the following as you implement this new Hawaii County TAT: • It is essential that Hawaii County have an accurate and complete list of all visitor accomodations located on Hawaii Island,across all sectors-hotels,timeshares,condos, bed and breakfasts,and STVRs. • Taxes must be collected equitably from every legal visitor accommodation. Illegal visitor accommodations must be shut down. • We recommend there be transparency on how these funds will be spent,including an accounting of how funds from the Hawaii County TAT,which will go to into the county's general fund,are utilized. • We request that a portion of these funds be used to address larger scale infrastructure needs important to Hawaii County's workforce including:roads,water,wastewater,expanded mass transit,and the development of more affordable workforce housing. Resolution 263-21,Draft 2, Hawaii County Councilmember Heather Kimball publicly stated during the November 18, 2021 Council meeting that HSAC is recommending that Act 001 be amended to remove the 3°I cap on TAT collections at the island level.This language was included in the GORDEC committee agenda from 11/17, but was not included in the documents on Laserfiche for this Hawaii County Council meeting. She explained that becausee each county's legislative body is the responsible party creating the tax,each county should then be able to determine the rate of that tax. • While we understand HSAC's justifcation for this measure,we encourage caution,as the potential variability in tax rate from year-to-year makes business planning for the visitor industry much more difficult. • This could also unintentionally create an unequal playing field,were the counties to amend their county TAT rates at different times, and/or for different amounts. Hawaii Island often competes with Maui, Oahu and Kauai to host events,groups, conventions and the meetings market(CMI). Comm. No. Ref. To: V1�tl1L1 Ref. Date - 8 2021 • Hawaii County has also allocated signifcant funding to the Island of Hawaii Visitiors Bureau over the years to compete for this important CMI market,which is essential for our island's visitor industry overall. • Contracts for the CMI market are often signed years in advance,so collection of additional fees would be difficult to implement. • The current rate of combined state and county TAT and GET,at nearly 18%with allowable administrative fees, is one of the highest in the nation. We are in full support of the Department of Finance's request in Resoultion 276-21 to fund an additional three clerks to oversee the administration and collections of the new Hawaii County TAT. The KCRA members represent 3,940 hotel and timeshare rooms on the Kohala Coast. Our resorts house another 3,500 full and part-time residential and STVR units. KCRA members also include shopping,entertainment,golf,spa, and restaurants. KCRA members employ more than 5,000 Hawaii Island residents,supporting 20,000 community members. Estimates are that with the passage of Bill 81 Draft 2, in 2022, KCRA members will pay more than$60 million in state and county TAT, and$25 million in state and county GET. Further, KCRA members,and the businesses and residents within our resorts, pay$73 million in property taxes to Hawaii County,one fourth of total collections. Finally, between 2018 and 2021, KCRA members invested more than$450 million in infrastructure and property upgrades,which supports Hawaii Island's construction industry. Thank you for the opportunity to comment on Bill 81, Draft 2; Resoultion 263-21, Draft 2; and Resolution 276-21 . Sincerely, t Stephanie Donoho Administrative Director, Kohala Coast Resort Association Pat Fitzgerald,CEO, Hualalai Investors-President, KCRA Scott Head,VP Resort Operations,Waikoloa Land Company—Vice President, KCRA Craig Anderson,VP Operations, Mauna Kea Resort—Secretary/Treasurer, KCRA Charlie Parker,General Manager, Four Seasons Hualalai—Board of Directors Charles Head,General Manager, Fairmont Orchid—Board of Directors Simon Amos, Hotel Manager, Hilton Waikoloa Village—Board of Directors Rob Gunthner,Area VP Resort Operations, Hilton Grand Vacations—Board of Directors Sanjiv Hulugalle, Regional VP and General Manager, Mauna Lani,Auberge Resorts Collection—Board of Directors Steve Yannarell, General Manager,Waikoloa Beach Marriott—Board of Directors PO Box 6991,Kamuela,H196743*(308)747-5762*kohallacoastresortassn@L7mall.com*www.kohalacoastresorts.com