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Act 1, in lieu of the counties receiving a distribution from the State, provides authority for a Countywide Transient Accommodations Tax within the Maui County Code which implements the MCTAT. On October 1, 2021, Maui County Council passed Ordinance No. 5273, Bill No. 101 (2021), Draft 1 establishing a rate of 3 percent on all gross rental, gross rental proceeds, and fair market rental value considered taxable under the definitions of Section 237D-1, Hawai`i Revised Statutes (HRS).
General rule of thumb is if you pay the State TAT, you will need to pay the County. All operators, plan managers, transient accommodations brokers, travel agencies, or tour packagers within the County must hold State registration in accordance with Sections 237D-4 and 4.5, HRS. This also applies to every transient accommodation broker, travel agency, and tour packager who arranges transient accommodations at non-commissioned negotiated contract rates.
The effective date for the MCTAT is November 1, 2021.
Since the effective date is November 1, 2021, those who pay the State TAT on a monthly basis will also need to remit their first payment to the County on or before December 20, 2021. For quarterly filers, the first deadline covering the period November 1, 2021 through December 31, 2021, will be due on January 20, 2022. The timing of payments will coincide with the State. The first annual reconciliation is due on April 20, 2022, covering the period November 1, 2021 through December 31, 2021. Every annual reconciliation thereafter will cover the entire previous calendar year and will be due on April 20.
Unfortunately, the answer is no. Separate payments will need to be made to the State Department of Taxation (DOTAX) and to the County Director of Finance. Act 1 (2021), prevented DOTAX from assisting the counties with billing and collection of the County TAT. The County will maintain a separate County TAT account for each taxpayer. If a single payment is made to the State that includes both State and County TAT, you will receive a refund of the portion not owed to the State. You will then have to remit the payment separately to the appropriate jurisdiction.
No, a report filed with DOTAX will be deemed as filed with the County. However, the MCTAT payment, will have to be separately remitted to the County Director of Finance (“Director”). A payment voucher will be available online for your use.
You will be required to include your State TAT number with the payment made to the County. This will allow the County to properly credit your County TAT account.
The Director has the authority to estimate tax liability of the operator or plan manager from any information obtained from DOTAX. The Director may assess the taxes, interest, and penalty due to the County and make a demand on the payment.
If there is an intent to evade tax, the tax may be assessed or levied at any time; provided that the burden of proof with respect to the issues of falsity or fraud and intent to evade tax shall be upon the County.
For late payments, the Director has the authority to collect interest and penalties. Penalties and interest are assessed on any tax that is not paid on time. If the tax is not paid within 60 days of the due date, a penalty of 20% of the unpaid balance will be assessed. If you are required to pay by electronic funds transfer (EFT) and do not timely pay by EFT, a penalty of 2% will be assessed on the tax due. Interest is assessed at the rate of 2/3 of 1% per month or part of a month on any unpaid taxes and penalty. If a payment is dishonored, a $30 service fee is assessed.
Important: Payments are applied to the fees first, then interest, then penalty, and then the tax.
Yes, the MCTAT may be passed on to the visitor.
The County of Maui will accept MCTAT payments in the following methods:
MCTAT payments for multiple State TAT ID numbers may be remitted through a wire transfer rather than having to submit ACH payments online for each individual State TAT ID number. Detailed payment information, in an Excel file format must be submitted/uploaded via County’s secured file transfer system or other transmission method as determined by MCTAT. A bulk filing application form must be completed and submitted to MCTAT. Application form(s), file specifications, and wire transfer instructions will be made available online in mid-November.
Under Act 1 (2021), Section 7 states: “[t]he county transient accommodations tax, if adopted, shall be imposed on the gross rental, gross rental proceeds, and fair market rental value of all written contracts that require the passing on of the taxes imposed under this chapter; provided that if the gross rental, gross rental proceeds, and fair market rental value are received as payments beginning in the taxable year in which the taxes become effective, on contracts entered into prior to the adoption of the ordinance pursuant to section 46- , HRS, and the written contracts do not provide for the passing on of increased rates of taxes, the county transient accommodations tax shall not be imposed on the gross rental[.]”
*Examples of language for the passing on of increased tax rates (not inclusive):