THE SENATE	S.B. NO.	2548
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII

A BILL FOR AN ACT

relating to the transient accommodations tax.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the transient accommodations tax was established by Act 340, Session Laws of Hawaii 1986, and took effect in 1987 to provide revenue to the counties to offset the impacts of visitor activities on county infrastructure and services. Over time, the statutory allocation of transient accommodations tax distributed to the counties was reduced to a proportional fraction of the total collections.

The legislature further finds that Act 1, First Special Session Laws of Hawaii 2021 (Act 1), permanently removed the distribution of state transient accommodations tax revenues to the counties; however, Act 1 also established authority for the counties, through their respective directors of finance, to levy a county transient accommodations tax in addition to the transient accommodations tax collected by the State.

With the possible increase in the transient accommodations tax, staycations for residents will be even more burdensome. Residents of the State already pay taxes that are used to maintain state facilities and infrastructure. The purpose of the transient accommodations tax is to offset the impacts of activities by visitors, not residents.

The purpose of this Act is to allow Hawaii taxpayers to claim a transient accommodations tax credit against the taxpayer's individual income tax liability.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Transient accommodations tax credit. (a) Any taxpayer who files an individual income tax return may claim a transient accommodations tax credit against the taxpayer's individual income tax liability equal to the full amount of transient accommodations taxes incurred and paid within the State during the taxable year.

(b) If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by the taxpayer who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(c) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91.

(d) All the provisions relating to assessments and refunds under the chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(e) Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the claim may be claimed."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval, and shall apply to taxable years beginning after December 31, 2021.

INTRODUCED BY:

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Report Title:

Transient Accommodations Tax; Tax Credit

Description:

Allows Hawaii taxpayers to claim a refundable transient accommodations tax credit against the taxpayer's individual income tax liability.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.