Last year, Maui county government officials slapped the timeshare industry with a much higher real property tax rate by creating a brand new category called timeshares, and now it seems the City & County of Honolulu is following suit.

The reasoning behind this move, it seems, is the Transient Accommodations Tax, or TAT, is determined on the basis of the “fair market value,” which for time share units is defined as “an amount equal to one-half the gross daily maintenance fees that are paid by the owner.”

This was the best approximation lawmakers could come up with when they passed the amendment to the TAT law that levies the tax on time share units. Advocates of the separate category for timeshare units argue that as a result of basing the TAT on maintenance charges, substantially less in TAT revenue is produced than the tax would if applied to a regular rental of a hotel room.

Thus, timeshare units are perceived as not paying their “fair share” of the cost of the impact they make on the county

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