Honolulu, the last county to adopt a hotel tax

HONOLULU – Honolulu became the last county in Hawaii to adopt its own hotel tax after Mayor Rick Blangiardi signed a law adding a 3% surtax to the state’s short-term rental tax.

Authorities estimate the new tax could generate around $ 86 million a year for Oahu, the Honolulu Star-Advertiser reported.

The surcharge will be imposed in addition to the state’s 10.25% tax on gross proceeds from rentals of hotels, vacation rentals, timeshares and other transient accommodation.

Honolulu plans to allocate 58% of tax revenue to the general fund, about 33% to rail and about 8% to a special fund for natural resources.

The counties of Kauai, Maui and Hawaii have already adopted the surtax.

The counties took action after the state legislature this year stopped sharing a portion of state tax with them. The counties collectively received about $ 130 million in state tax revenue on temporary accommodation each year. Honolulu County received 44%, or about $ 45 million, of the total.

The measure passed by lawmakers allows counties to recover funds by implementing their own taxes.

Honolulu City Council passed the bill by 6-3 earlier this month. Council members Heidi Tsuneyoshi, Augie Tulba and Carol Fukunaga voted against because he allocated funds to the city’s rail project.