Honolulu Mayor signs bill to recover lost Transient Accommodations Tax revenue
In a significant move forward, Honolulu Mayor Rick Blangiardi signed Bill 40 (2021), CD2 FD1, into law, which is anticipated to generate between $75-85 million a year. The bill as signed will not only restore lost Transient Accommodations Tax (TAT) revenue, but it will support our valuable natural resources by addressing the impacts of tourism on O‘ahu and ensure Honolulu has a functional rail system.
“Bill 40 restores much-needed revenue and is expected to generate new funding to maintain core city services that will benefit our communities,” said Mayor Rick Blangiardi. “We sincerely thank the Honolulu City Council for its support in passing this important bill which will help fund vital city functions, including police and fire protection, facility and infrastructure maintenance, improvements to parks, beaches, and roads, and the rail project.”
The city previously received approximately $45 million annually from the state as part of the TAT allocation, however due to the pandemic the city has been operating without the TAT revenue throughout FY21.
Bill 40 creates a hotel tax that will charge visitors to O‘ahu an additional 3% for accommodations. In total, 58.33% of the revenue generated will go to the general fund, 33.33% to the Honolulu Authority for Rapid Transportation (HART), and 8.34% will go to the special fund for natural resources.
“I am extremely humbled that Mayor Blangiardi’s Administration and the Honolulu City Council approved a portion of the new county TAT for HART. This new funding source will allow us to build and complete a functional rail system to major employment centers on O‘ahu and connect with the existing robust bus system already in place,” said HART Interim Executive Director and CEO Lori Kahikina. “I also thank our HART Board for the support they have given through the entire process, including providing a resolution to City Council and testifying at the many hearings.”
“We are hopeful this revenue will assist the City in addressing tourism impacts, boost our ability to provide City services to our residents, and support multi-modal transportation,” said Councilmember Brandon Elefante, Honolulu City Council, District 8.
Bill 40 was passed by the Honolulu City Council on Dec. 1, 2021.
Mayor Blangiardi also signed Bill 39 (2021), CD2 into law, relating to amendment of alternative energy improvements real property tax exemption. This ordinance makes portions of land actually used for the active production or storage of renewable energy exempt from a percentage of taxes imposed.
In addition, Bill 34 (2021), CD2 relating to commercial activities at public parks, will pass without Mayor’s signature. Bill 34 further expands the prohibition on commercial activities in City parks on O‘ahu’s Windward coast to include portions of the North Shore.
