The county tax forms are in place, new government employees are being hired and the hospitality industry is ready to begin what Mayor Mitch Roth calls the “unacceptable but necessary” step of charging guests at hotels and transient vacation rentals an extra 3% starting Saturday.
The new 3% county tax is on top of the current 10.25% state transient accommodations tax. The county implemented the new tax after the state Legislature earlier this year took away the counties’ share of the state tax.
Stephanie Donoho, administrative director for Kohala Coast Resort Association, said the resorts are ready to do their part.
“I think everything is in place to collect the new TAT come Jan. 1,” Donoho said.
County officials estimate the proposed tax will bring the county back up to its $19 million annually within three years, but that all depends on how long the coronavirus pandemic lingers.
“Imposing an additional tax on our residents and visitors to make up for a deficit created by the state is unacceptable but necessary,” Roth said. “At this point, we have to take it in stride in order to ensure that we can continue providing invaluable services to our community. We thank our partners in the travel industry and our locals affected for their understanding as we continue to work toward an equitable solution for all.”
The County Council earlier this month unanimously passed a bill authorizing the new tax, which was promptly signed by Roth. The council then approved a resolution allowing the Finance Department to create three new positions to handle the paperwork of collecting the tax.
“Based on preliminary estimates provided by the State of Hawaii Department of Taxation (DoTax), it is expected that Hawaii County will receive approximately 33,000 tax filings annually,” Deputy Finance Director Steven Hunt said in a Nov. 12 memo to the council requesting the positions.
“The majority of the payments are likely to be received electronically, however, the reconciliation of these payments (whether electronic or mailed in with coupons) against the monthly Hawaii County taxpayer filing data shared by DoTax will be a somewhat laborsome process until a software solution is procured and implemented,” he said. “Additionally, we will need staff to answer taxpayer inquiries, create and track bills for delinquent accounts, and follow up on potential non-filer complaints reported.”
The new positions include an accountant, at a salary range of $45,288-$67,944 annually, and two seniorr account clerks, with salary ranges of $39,540-$58,488 each.
Hotels, resorts, transient vacation rental establishments and others who rent for less than six months can get more information at https://www.hawaiicounty.gov/departments/finance/transient-accommodations-tax-tat . The tax will be collected starting Jan. 1, but the county won’t get ts first tax payment until February.