STAND. COM. REP. NO. 1121

Honolulu, Hawaii

RE: S.B. No. 714

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 714, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE TRANSIENT ACCOMMODATIONS TAX,"

begs leave to report as follows:

The purpose and intent of this measure is to make necessary updates to the transient accommodations tax law.

Specifically, this measure:

(1) Includes resort fees and other fees among the gross rental and gross rental proceeds upon which the tax is calculated for transient accommodations;

(2) Increases the fair market rental value base upon which a time share unit is taxed to an amount equal to one hundred percent of the gross daily maintenance fees paid by the unit owner and attributable to the unit; and

(3) Specifies that transient accommodations intermediaries who arrange transient accommodations at noncommissioned negotiated contract rates shall pay the tax.

Your Committee received written comments in opposition to this measure from American Resort Development Association-Hawaii, Aqua-Aston Hospitality, and Kohala Coast Resort Association

Your Committee received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that, as the transient accommodations industry is increasingly evolving, it is necessary for the transient accommodations tax law to adapt accordingly to ensure compliance with the law and timely collection of the tax.

Your Committee has amended this measure by making technical nonsubstantive changes for purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 714, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 714, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair