Tourism Leaders Back Hawaii Tax


HONOLULU -- Major hotel chains, airlines and tourism organizations rallied around a move by Hawaii's state government to increase the hotel room tax in return for more than doubling tourism promotion dollars.

A statement signed by 46 tourism leaders, including heads of the Hawaii Visitors & Convention Bureau and Hawaii Hotel Association, supports an increase in the state's room tax from 6% to 7%. In return, 3% of the total room tax -- at least $60 million a year -- will be earmarked for tourism marketing.

Currently, the HVCB, a non-profit, private group under contract to the state, gets $25 million in state funding. The provisions are contained in Senate Bill 2201, which would also establish an 11-member tourism board to administer the funds.

The bill is part of a controversial package of state-sponsored measures designed to kick start an economy that has undergone seven years of economic slump. Other bills include an increase in the state's 4% general excise tax (GET), levied at all levels of sales and services, including all retail sales, and a lowering of state income and corporate taxes.

The statement, presented as testimony in legislative hearings, states: "While the visitor industry is not comfortable with the idea of higher taxes that will add to the cost of a Hawaiian vacation and reduce Hawaii's competitiveness, the visitor industry is willing to support modest tax increases if it will lead to dedicated funding at globally competitive levels."

The hotel association, in a position paper, said it "reluctantly supports" the room tax increase, but "strongly supports" the dedicated source of tourism promotion funding.

On rooms, guests currently pay the 6% hotel room tax, plus a 4.166% GET. Honolulu, the association noted, currently has the nation's fourth-highest city taxes paid per room, and the highest among resort areas.

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