Hawaii Governor Neil Abecrombie and the State Legislature have proposed an increase in the Timeshare Owners Tax (TOT) as a way of fixing the almost $800 million budget deficit. The owners of Hawaiian timeshares already pay some of the highest taxes in the US.
The new bill proposes an increase in the TOT rate in two ways:
The percentage – Currently 7.25% would be increased to 9.25%
The formula – The base maintenance fee calculation would be increased from 50% of the gross daily maintenance fee to 150% of the gross daily maintenance fee.
This increase results in a nearly 400% increase in the TOT.
There is a provision for the percentage rate to return to the 7.25% rate in 2015, but there is no provision made for the 150% maintenance fee calculation to return to 50%.
At the current rates and calculations, a maintenance fee of $1,000 pays a TOT of $36.20. The new proposal will increase the TOT payment to $138.70.
ARDA-ROC Chairman, Ken McKelvey stated: “Enough is enough. We have a responsibility to the more than 1 million timeshare owners who contribute to ROC and the hundreds of Home Owners’ Associations (HOAs) who volunteer and financially support ARDA-ROC for this very reason – to make sure that ’the tax the visitor rather than voter’ mentality doesn’t overtake the rights of timeshare owners.”
Hawaii is the only state to have a transient lodging tax which was originally levied on timeshare owners in 1998.
Advantange Vacation will keep you updated on this very important issue concerning all timeshare owners in Hawaii.
At Advantage Vacation our goal is to educate the public on the timeshare industry and timeshare resales. If you are interested in purchasing a timeshare resale or selling a time share, the licensed real estate professionals at Advantage Vacation would be happy to assist you, answer your questions and be with you every step of the way – even after the transaction is completed.
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