(BIVN) – A group of Kohala Coast resorts is opposed to an increase in the General Excise Tax surcharge collected by the County of Hawaiʻi.
On Monday, during the Hawaiʻi County Council Finance Committee meeting in Hilo, Kohala Coast Resort Association administrative director Stephanie Donoho testified against Bill 19, which would raise the existing one-quarter percent (0.25%) GE surcharge to one-half percent (0.5%) beginning on January 1, 2020.
“A little more than a year ago, the [transient accommodations tax] was raised to 10.25% and those costs were to support the Honolulu rail project and were passed on to visitors to our island,” Donoho said. “The County of Hawaiʻi property taxes within the resort and hotel-zoned areas, last year, were increased 10.4% percent to $11.55 per thousand dollar valuation. Fuel taxes were increased last year to help support these roadway initiatives and the GET was raised another quarter percent for these same initiatives.”
“The visitor industry has been hit very hard on our island during the last year,” Donoho continued. “[The Hawaii Tourism Authority] just did its final annual report and on Hawaiʻi Island we saw a decline in visitation. The rest of the islands saw an increase in visitation, but we saw a decline.”
“We are doing our level best to keep the 5,000 people that we employ along the Kohala Coast, employed,” Donoho said. “But, like Hawaii County, we have to figure out how to balance all of the needs as well, and in this competitive environment even a quarter of a percent in GET can mean the difference between whether or not someone chooses Hawaiʻi County and Kohala Coast for a meeting, or whether they choose Wailea on Maui which does not have the half percent surcharge.”
Donoho asked the county to look at other revenue streams. “One of those is looking at the increase in vacation rentals on the island,” she said, “and making certain that people who are in this industry are paying an equitable share of the costs for property taxes. Hawaii Tourism Authority released its visitor plant inventory, which I sent to all of you last week, that identifies from a point in time analysis that there were 7,051 individual vacation rental units being advertised on our island, representing 13,396 rooms compared to 6,110 hotel rooms.”
“Many of those properties are in areas that are zoned residential, zoned as an actual homeowner, or zoned agriculture,” Donoho said, “they’re not paying the same property tax rate as the resorts are. and we’d like to see that equability happen first. we also support the real property tax working group assessment that tax classifications for our island should be thoroughly reviewed and that there are areas that possibly need to be rezoned as many of the people paying agricultural rates on our island are actually living in residential used areas. finally, we believe that it is within your purview as a County Council to address some of the inefficiencies in County government that slow down the cost of doing business, specifically in the building and planning department.”
The Hawaiʻi County Council Finance Committee voted to advance the bill with a positive recommendation. Kohala councilman Tim Richards was the only vote in opposition.