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BLOG: Souki Makes Pitch for More County TAT Money

January 15, 2014, 1:18 PM HST
* Updated January 15, 2:41 PM
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House Speaker Joe Souki today called upon his colleagues to consider removing the cap placed last year on the share of the transient accommodation tax the state gives to the counties.

“In this strong economy, should we not be thinking about a greater partnership with our counties, who provide much of the services that directly support tourism?”  Souki said in opening day remarks.

“They are the ones who maintain our roads and parks and provide the law enforcement officers and first responders who directly serve our visitors as well as our kama`aina,” the veteran legislator from Maui said. “I believe the gesture is not only long overdue, but should be viewed as a better long-term investment in our counties and in our number one industry.”

Souki suggested that the state look into collecting sales taxes generated by out-of-state online companies as a way of making up for the reductions in state revenues.

“Every day, they compete toe-to-toe with local companies on a playing field that is clearly tilted in their favor. It’s time we level the playing field,” he said.

“We should also consider joining other states who have banded together to look at this issue for a collective solution, as well as consult with our congressional delegation on actions being considered at the federal level.”

The cap on the hotel room tax allocations has the counties’ mayors preparing to lobby the Legislature for authority to tack on an increase of up to 1% the general excise tax for their own use. The GET is currently 4% on most transactions, although Oahu has instituted another half-percent for development of its rail project.

But Souki has his work cut out for him.

During negotiations in 2013, lawmakers debated what the counties’ share of the TAT should be. They finally settled on 9.25%, but the House was looking to set it at the 2011 level of 7.25%.

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