TRANSIENT ACCOMODATIONS TAX (TAT)
ANNOUNCEMENT NO. 2021-01
September 16, 2021
Proposed Maui County Transient Accommodations Tax (MCTAT)
Effective October 1, 2021
The purpose of this Announcement is to notify the public of the proposed MCTAT and to provide information for taxpayers subject to the MCTAT.
Act 1, 1st Special Session 2021 (House Bill 862, H.D. 2, S.D. 2, C.D. 1), which became law on July 8, 2021, authorizes the counties to establish and administer their own transient accommodations tax (TAT) at a maximum rate of 3%. In order to establish the MCTAT, the County must enact an ordinance. The Director of Finance in each County that establishes a county TAT is granted the same authority that the Director of Taxation has under chapter 237D, Hawaii Revised Statutes (HRS).
The Maui County Council introduced a bill to establish Chapter 3.47, Maui County Code (MCC), which implements the MCTAT. Committee Meetings to discuss the TAT were scheduled on August 4, 2021, August 18, 2021, and September 1, 2021. The proposed bill was recommended to be passed on first reading by the Budget, Finance, and Economic Development Committee meeting on September 1, 2021. The proposed bill is posted for first reading on September 17, 2021, and second and final reading on October 1, 2021.
Imposition of MCTAT
Beginning October 1, 2021, the MCTAT is levied at a rate of 3 percent1 on every taxpayer that has taxable gross rental proceeds2 and/or total fair market rental value3 attributable to the County of Maui. The MCTAT is imposed in addition to the State TAT, which is currently levied at a rate of 10.25 percent.4 These amounts can be found on Forms TA-1 and TA-2 which must be filed with the State of Hawaii Department of Taxation (DOTAX). A sample Form TA-1, the periodic return for taxable gross rental proceeds and total fair market rental value of timeshares, is attached to this announcement for reference.
Subject to approval, the proposed Chapter 3.47.050, MCC, provides that all operators, timeshare plan managers, transient accommodations brokers, travel agents, and tour packages subject to the MCTAT must have a State TAT license issued pursuant to sections 237D-4 or 237D- 4.5, HRS. Taxpayers who are registered with the State and have a valid State TAT number, will be deemed registered for MCTAT. Taxpayers subject to the MCTAT do not need to register separately with the County of Maui.
Subject to approval, under the proposed Section 3.47.060, MCC, the County Director of Finance has the authority to prescribe how periodic and annual County TAT returns are filed. The County Director of Finance has determined that State TAT returns filed with DOTAX will also be deemed to have been filed with the County of Maui. Therefore, taxpayers who are subject to the MCTAT will only need to file Forms TA-1 and TA-2 with DOTAX, as they are currently required.5 Taxpayers subject to the MCTAT will not need to file separate MCTAT return with the County of Maui.
Payment Due Dates
MCTAT payments are due concurrent with the State TAT returns and payments. Thus, payments are due on or before the 20th day of the calendar month following the close of the filing period. For periodic returns, taxpayers are required to file Form TA-1 on a monthly, quarterly, or semi-annual basis.
- For monthly filers, the first MCTAT payment is due on or before November 20, 2021.
- For quarterly filers, the first MCTAT payment is due on or before January 20, 2022.
- For semi-annual filers, the first MCTAT payment is due on or before January 20, 2022, however, the MCTAT payment amount will be based on income from October, November and December of 2021 only.6
The annual reconciliation of the State TAT return (Form TA-2) is due on or before the 20th day of the fourth calendar month following the close of the taxable year. As a general rule, a MCTAT payment will only be due if taxable gross rental proceeds or fair market rental value attributable to County of Maui is reported on Form TA-2 and not reported on Form TA-1 during the taxable year. If an MCTAT payment is due, filing of Form TA-2 and payment must be made by the deadline. For calendar year taxpayers, the deadline is April 20, 2022.
How to Calculate and Make MCTAT Payments
To calculate the MCTAT payment, multiply the sum of the taxable gross rental proceeds and fair market rental value attributable to County of Maui by 3 percent. For a monthly filer, the first MCTAT payment, as reported on the taxpayer's Form TA-1 for October is due on or before November 20, 2021.
To be determined.
For more information, Contact the MCTAT Office by email: Email MCTAT Office
DOTAX will not be able to answer any questions regarding the MCTAT.
1 Maui County Code §3.47.010.
2 State of Hawaii, Department of Taxation - Form TA-1/TA-2, Line 2, Column C.
3 State of Hawaii, Department of Taxation - Form TA-1/TA-2, Line 6.
4 Hawaii Revised Statutes (HRS) §237D-2.
5 HRS §§ 237D-6, 7.
6 Maui County Transient Accommodations Tax is levied beginning on October 1, 2021.