On Monday, June 25, Governor Ige released his list of bills he intends to veto. On the list is one tax bill, SB 2699, which imposes the transient accommodations tax on “resort fees“ which are very broadly defined of the bill.
The Governor said:
SB2699 RELATING TO THE TRANSIENT ACCOMMODATIONS TAX
This measure attempts to include resort fees in gross rental proceeds that are subject to the Transient Accommodations Tax (TAT).
Rationale: This measure creates an extensive and ambiguous expansion of the TAT. The vague language could subject restaurants, spas, and other businesses located in hotels to add the TAT to their services. Currently, the Department of Taxation imposes the TAT on mandatory resort fees. The additional taxes imposed by this measure would result in significant increases in accommodation costs for our residents and visitors staying in Hawai‘i hotel properties.
The Tax Foundation of Hawaii is generally in accord with the Governor‘s reasoning. For our prior coverage, see “Reactionary Reaction to Resort Fees,” https://www.tfhawaii.org/wordpress/blog/2018/05/reactionary-reaction-to-resort-fees/
The Governor’s intent to veto list does not commit him to veto any bill, as his final decisions need to be made by July 10. However, any bill that has passed the Legislature and is not on the list will become law, either with or without the Governor’s signature.
Here is a link to the Governor‘s list: