I received an email  informing me of a lawsuit being filed by both Associations of the Westin Ka anapali Ocean Resort Villas and Westin Ka anapali Ocean Resort Villas North against Maui County and the Maui County Council regarding the real property tax rates as applied to timeshare resorts. 

In review, in May, 2012, the Maui County Council Budget and Finance Committee voted to increase the timeshare property tax rate and while it was lower than the requested rate increase, it marked the second year in a row where the largest tax increase on Maui fell on timeshare owners. 

As followers of this blog know, I spoke before the Maui County Council several times last year in opposition to any increase in the tax rate for timeshare owners and reprint the email I received in its entirety in my support of both of the Westin Ka anapali Ocean Resort Associations lawsuit. 

The email follows:

As board members of the Ocean Resort Villas Vacation Owners Association and the Ocean Resort Villas North Vacation Owners Association (“Associations”) respectively, we are writing to inform you of a lawsuit filed by the Associations against Maui County and the Maui County Council regarding the real property tax rates applied to timeshare resorts.In 2005, Maui County Council separated out timeshare resorts from the hotel and lodging tax classification. Despite the outreach and efforts of the Associations, Maui County has voted repeatedly for large and disproportionate increases in the timeshare resort tax rate. The 2005 tax rate was $8.30 per $1,000 of assessed value, and the current tax rate on timeshare resorts is $15.55 per $1,000 of assessed value. The tax rate paid by timeshare owners is shockingly higher than all other categories as shown below.

  • 65% higher than Hotel & Resort
  • 143% higher than Apartment
  • 170% higher than Residential
  • 238% higher than Commercialized Residential
  • 442% higher than Homeowner 

The high tax rate results in high ad valorem taxes per unit week, which are directly paid by you, the timeshare owner. The Associations’ experts in this area believe timeshare resort tax rates will continue to increase disparately from other categories.

The decision to initiate this lawsuit was not made lightly. During multiple Maui County Council meetings over the last several years, the board members of each Association and staff of The Westin Ka‘anapali Ocean Resort Villas testified of the adverse impact of the timeshare resort tax rates and met with individual Maui County Council members to explain who timeshare owners are and the financial support we bring to local business on the island.  Your board members spent many hours reviewing this matter and actively explored other viable options for addressing the inequity of the tax rates.

Our hope is to amicably resolve this matter with Maui County. However, each board is prepared to pursue this lawsuit until final disposition by the highest court available. Each board has reserved funds in the budget of each Association for the long term funding of this lawsuit. We will provide you with additional information about the funding of this litigation as part of our 2014 budget explanation.

Please note, it is not necessary for you to contact any Maui County official about this matter. The Associations’ board members diligently sought out the best representation for this litigation and retained Mr. Robert Klein, a former Associate Justice of the Hawaii Supreme Court.   Please also do not attempt to contact Mr. Klein directly. As board members, it is our responsibility to work with Mr. Klein on the litigation. We will keep you informed and updated on this matter as more information becomes available.

If you have any questions about the lawsuit, please contact your Association at Kaanapali@myassociationdirect.com .

Stay well,

Your Association Board of Directors

I will continue to keep you informed and updated as the lawsuit progresses.  If you have any questions about the lawsuit or the tax legislation, please leave me a comment below.

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