Imposes a TAT surcharge on hotels converting to time shares or condominiums in an amount equal to 50% of the average of the previous two years of TAT revenues collected by the hotel. The surcharge tax shall be assessed and levied against the owner of the hotel prior to the conversion. (SD2)

A BILL FOR AN ACT

SECTION 1. The legislature finds that there is a concern in regard to the growing number of hotels converting into timeshare or condominium use. This new trend is negatively affecting transient accommodations tax revenues that are vital to the counties and the State for infrastructure, repair, and maintenance funds. In addition to the loss of transient accommodations tax revenues, the loss of hotel room inventory could negatively affect the tourism industry as a whole.

The purpose of this Act is to require any hotel that converts into timeshare or condominium use to pay a transient accommodations tax surcharge in order to ensure a stable transient accommodations tax revenue base.

SECTION 2. Chapter 237D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237D-   Conversion of hotels to condominium or time sharing plans; imposition of tax. A hotel that converts to a time sharing plan under chapter 514E or a condominium under chapter 514A shall be subject to a transient accommodations tax surcharge in an amount equal to the average of fifty per cent of the previous two years of transient accommodations tax revenues collected by the hotel. The transient accommodations tax surcharge shall be assessed and levied against the entity owning the hotel prior to the conversion."

SECTION 3. Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows:

""Transient accommodations" mean the furnishing of a room, apartment, suite, or the like [which] that is customarily occupied by a transient for less than one hundred eighty consecutive days for each letting by a hotel, apartment hotel, motel, condominium property regime or apartment as defined in chapter 514A, cooperative apartment, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, or other place in which lodgings are regularly furnished to transients for consideration. The term "transient accommodations" includes time share units under section 514E-3."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2050.