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County has its own TAT now

LIHU‘E — Mayor Derek Kawakami signed county Bill 2829 into law, now Ordinance 1099, which establishes a 3% Transient Accommodations Tax program for the County of Kaua‘i.

The bill was unanimously passed by the County Council on Wednesday. The law takes effect Oct. 1.

“Thank you to our councilmembers for your support on this very-important initiative that gives our county control of our own destiny,” said Kawakami. “This ordinance now allows us to supplement the many state- and tourism-related activities that are funded by our county taxpayers. Remember, this is not new revenue for the county. This will replace what we used to get from the state for transient accommodations.”

In July, the state Legislature passed a bill that became Act 1 with Gov. David Ige’s signature, that removed the counties’ allocation of state-collected TAT revenues. The county used to receive close to $15 million a year from the state to support the impacts of tourism activities on county services. Act 1 also authorized the counties to establish and administer their own TAT at a maximum rate of 3%, in addition to the state TAT.

The state TAT is 10.25 percent. When the state and county TATs are added and subject to the 4.5% general excise tax, a hotel room or other transient accommodation on Kaua‘i that is listed for $100 a night will cost the renter around $118.

The council introduced Bill 2829 in July 21, establishing Chapter 5A, Article 4 within the Kaua‘i County Code. A public hearing was held last month, and a committee meeting took place on Sept 1. The bill passed its second and final reading on Sept. 15, and Mayor Kawakami signed it into law on Sept. 16.

Beginning Oct. 1, the county TAT is levied at a rate of 3% on every taxpayer that has taxable gross rental proceeds and/or total fair market rental value on Kaua‘i. The state TAT is also referred to as the hotel room tax though it applies to more than just hotels.

The bill is now Ordinance 1099, and can be viewed at https://tinyurl.com/KauaiTAT.

For more information on the new county TAT, visit kauai.gov/tat or email countytat@kauai.gov.
Source: The Garden Island

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