Good News for Hawaii Timeshare Owners, Tax Hike Dead

Hawaii timeshare tax issues are looking better.

The joint Hawaii House and Senate Conference Committee approved omitting from Amendment SB1186, a proposed plan for a 27.5 percent increase in transient accommodation taxes paid by Hawaii timeshare owners. With Hawaii State Legislature acceptance, Hawaii timeshare owners will not see an increase in 2012 in the rate used to calculate transient accommodations taxes paid to the State of Hawaii.

The law taxing Hawaii timeshare occupants (note: this is anyone occupying the timeshare, whether they own or rent the property) was originally enacted in 1999 and was based on what Hawaii legislators felt was a need to tax timeshare users in a way similar to that which hotel guests are taxed. The basis for the taxation is that, “Transient individuals occupying a resort time share vacation unit utilize State and county facilities in a manner similar to transient individuals occupying a hotel room.” (see: http://www.state.hi.us/tax/taxfacts/tf98-04.pdf)

Are You a Hawaii Timeshare Owner?

ARDA-ROC has excellent resources for Hawaii timeshare owners who want their voice to be heard. ARCA-ROC is the American Resort Development Owners Association – Resort Owners’ Coalition, and serves as the first line of defense against legislation that may negatively impact timeshare owners and their well-being. Through ARDA-ROC, owners can be part of grassroots lobbying targeted at preserving, protecting, and enhancing their timeshare ownership.

Visit this link (ARDA- ROC Hawaii Timeshare Tax Resource Center) for sample letters, talking points, legislator contact information, and more helpful information on Hawaii timeshare taxation issues.

Lawmakers, Please Pick a Position on Timeshare Taxes

While it is great news that there will be no increase in this tax rate, thanks in large part to extensive lobbying by ARDA ROC, timeshare owners, and others in the timeshare industry, there remains one disturbing discrepancy that keeps creeping into tax debates nationwide. How do lawmakers resolve the simple fact that logically, timeshare owners cannot be both real estate property owners and transients like hotel guests?

It makes sense to tax Hawaii timeshare owners, South Carolina timeshare owners, or owners in any state or country. But lawmakers should be required to pick a status and stick with it. Either a timeshare owner is considered a real estate property owner and thereby pays taxes on his or her timeshare as real property, or a timeshare owner is a transient visitor, and pays taxes in the same way a hotel guest pays a hotel or transient tax. Taxing from both angles hardly seems fair or even conscionable.

No one suggests that timeshare owners should not be contributing to local tax bases. After all, they drive on the highways, and rely on local police, fire, and emergency medical support, while at the same time adding to the pollution and congestion of a local community. But double dipping on the taxation doesn’t seem fair either. And let’s never overlook the fact that timeshare owners and their guests account for huge boosts to local economies. They buy groceries; dine at restaurants, shop, and visit attractions and entertainment destinations. The timeshares themselves provide employment to local residents and growth opportunities as a business.

No doubt state and tax districts need help but when they overtax timeshare owners, then all they have really done is shoot themselves in the foot.

News on other Hawaii timeshare tax related issues: Two Sides to Hawaii Timeshare Tax Increase Issue