Think About It: This and TAT - KFVE, K5-Hawaii News, Weather and Sports

September 7, 2017

Think About It: This and TAT

In its weekly column this week, the Tax Foundation of Hawaiiand its president, Tom Yamachika, comment on the "transient accommodationstax", or TAT, being raised to help pay for the rail. As you might expect,certain non-Oahu state representatives and senators are unhappy about theseemingly incessant increases in rail costs, as they would like to see the TAT moneyput to other uses, like helping their islands' needs and projects. This sentimentis nothing new, nor will it ever go away.

Since the TAT is a statewide tax on hotel rooms, and sincehotel room occupancy and rates are seeing for record numbers, there should bemore money than ever to spread around. Add that to the fact that the TAT tax,which is just 31-years old, started as a 5% tax and will now be pegged at10.25%, and the question really becomes- how far can we go taxing our visitorsbefore they simply go elsewhere? And since Oahu people could argue that TATmoney has gone toward Neighbor Island projects like roadways and hospitals overthe years, someone might always feel like their causes and needs are slighted.

But let's not overlook the very fact that this currentlyever-growing gift cannot be added to or played with forever. There is a limitto how much we can keep asking visitors to fund our internal needs. For now,the politicians will grandstand on behalf of their individual fiefdoms, butthey all know that what goes around comes around, and the TAT has been a ratherconsistent windfall and a go-to money pit that should not be taken for granted,as we found out during the last recession here less than a decade ago. The T-A-Tis a T-A-X that has worked wonders locally for many years, but it is should notbe viewed annually as the fallback go-to grab bag or savior for all stateshortfalls and money needs. Think about it… 

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