HomeMy WebLinkAboutKohala Coast Resort Association (submitted by Stephanie Donoho)
August 31, 2026
Holeka Goro Inaba, Chair
Dennis Onishi, Vice Chair
Hawaii County Council
25 Aupuni Street
Hilo, HI 96720
Comments on Bill 173 Draft 2 Establishing a Bed and Breakfast Home Classification for Real Property Taxes;
Establishing Temporary Tax Amnesty and Elimination of Rollback Taxes and Penalties
Dear Chair Inaba, Vice Chair Onishi, and Members of the Hawaii County Council,
Thank you to the Hawaii County Council for its efforts over the last two decades to try to regulate the vacation rental
industry, in a way that is equitable to all properties participating in this important part of our visitor economy.
Our association is comprised of the developers, hoteliers and timeshare management companies within Mauna Kea,
Mauna Lani, Waikoloa and Hualalai Resorts. Our latest economic and community impact report shows that there are
approximately 1,100 short-term vacation rentals operating on the Kohala Coast, some managed by our members and
some managed by the owners or other management companies. The vacation rentals on the coast comprise less than
14% of the total for our island.
We have a number of concerns with Bill 173 Draft 2:
Many part-time residents within our resorts currently assessed under the residential class and valued at
market rates (no caps - $11.10/$14.50/$17.00 per $1,000 valuation, based on their property values), vary the
amount of time they spend on island, and rent out their property for the remainder of the year, an allowable
use within our resort zoning. If those owners stayed a specified number of days within their properties,
would they qualify for this new Bed and Breakfast class? If so, that decline in RPT revenues could be
significant, as the vast majority of the Tier II and Tier III residential classes are located on the Kohala Coast.
Providing tax amnesty or the removal of penalties and fees, to owners of one type of visitor accommodation
but not to others, is not treating the owners of all types of visitor accommodations fairly.
This measure does not address one of the primary goals the Council said it wanted to undertake while
creating short-term vacation rental legislation: to try to return inventory in the housing arena being used as
vacation rentals to full-time local residential use. Instead, this legislation could have the unintended
consequence of doing the exact opposite, incentivizing the transition of more local homes to short-term
vacation rental use.
This measure does not adequately address another housing creation incentive that the Council recently
adopted: allowing accessory dwelling units (ADUs) to be built on properties within specific zoning. Could
this measure allow a homeowner in this new Bed and Breakfast class to build an ADU on their property and
rent it as a vacation rental, or move into that new ADU and rent their former home as a vacation rental? How
would that address the need to house more local residents?
For all of these reasons we believe this measure needs further refinement, so that all Hawaii Island taxpayers
operating in the visitor accommodations sector are treated fairly.
The Kohala Coast Resort Association is a collection of master-planned resorts, situated north of the Ellison Onizuka Kona
International Airport at Keahole. KCRA members employ more than 5,625 Hawaii Island residents and directly support
an additional 8,600 family members, at our hotels, timeshares, golf courses, restaurants, retail shops and spas. In 2025
KCRA members paid nearly $120 million in GET,TAT and TOT to the State of Hawaii and $44 million in TAT, GET and
RPT to the County of Hawaii. operating within our resorts,
collectively paid $196 million in property taxes to Hawaii County in 2025, accounting for 35.4% of all property tax
collections.
Sincerely,
Stephanie Donoho
Administrative Director, Kohala Coast Resort Association
PO Box 6991, Kamuela, HI 96743 * (808) 747-5762 * kohalacoastresortassn@gmail.com * www.kohalacoastresorts.com