Council bill offers some
time shares tax breaks
Time-share units in areas zoned for apartments would get a tax break under a bill in the City Council.
One company that manages a time-share building in a hotel/resort-zoned section of Waikiki told the Council's Budget Committee yesterday that is not fair.
"We just want to be treated fairly and equally -- that all time shares should be taxed the same regardless of whether they're in a hotel zone or an apartment zone," said Marilyn Verner, general manager of Imperial Hawaii Vacation Club. "A time share is a time share."
The bill approved by the committee would allow time-share properties in apartment-zoned areas to be classified as an "apartment" and pay the lower apartment tax rate, currently $3.75 per $1,000 in valuation. The properties must have had 50 percent or less of their units in time share before Dec. 31, 1985.
The rate for property classified as hotel/resort is $10.63 per $1,000 in valuation, rising to $11.37 after July 1.
The bill requires that the property not have hotel amenities like room service.
Amy Hirano, executive director of American Resort Development Association Hawaii, said some older time-share units are in apartment zones because many units were apartments converted into time shares.
"These older time-share units do not have any of the hotel amenities," Hirano said. "We feel that perhaps leveling the hotel tax rates on these units is quite unfair."
City Budget Director Ivan Lui-Kwan said the administration is opposed to the bill because the city would lose $330,000 a year in property tax revenue, and units with the same use may be taxed differently.
Councilwoman Barbara Marshall said she would like city attorneys to take a look.
"I think that I would be more comfortable if we hold off until we get some kind of legal opinion on this because it seems to be that if we have a time share, we have a time share, and if we're taxing time shares at one rate, then that's how they should be taxed," Marshall said.
The bill now moves to the full Council for a public hearing on July 14.
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