Tom Yamachika: Creativity Abounds At Our Legislature
Tax increases are proposed for real estate sales, entertainment, time shares and more.
This year, our Legislature once again is poised to consider revenue raising 鈥 namely, taxes in new and creative ways. For a different perspective on the issue, we鈥檙e asking the Hawaii State Tax Watch Doggie, who has been going through the hundreds of introduced bills.
Q: So do you see any new and unusual revenue raisers there?
A: Woof! Arf! Yap!
Q: Use the keyboard.
A: would charge conveyance taxes on leases shorter than five years.
Q: Conveyance tax, the tax paid on real estate sales? But if the real estate is being rented, what鈥檚 the tax going to be paid on?
A: It鈥檚 on the present value of the lease payment stream.
Q: That couldn鈥檛 be much. What would be the tax on a one-year lease where the rent is $1,000 a month?
A: $17.43.
Q: Maybe you can get one bag of dog food for that.
A: Then there鈥檚 , which would charge a certain dollar amount per person per day on a business providing live adult entertainment.
Q: How much is the tax?
A: The amount is blank now.
Q: How are they going to enforce it? Will they need to send people to the establishment to count the patrons?
A: I鈥檒l volunteer! I, um, am curious about what kind of people go there.
Q: Not sure that鈥檒l work. You need to be 18 years old to go in, and you鈥檙e only 7.
A: Bummer. Well then, there鈥檚 , which is entitled 鈥淭ax Fairness.鈥
Q: That鈥檚 scary.
A: It increases various credits given to low-income taxpayers and pays for them by raising income tax rates. The top tax rate would become 13 percent.
Q: Didn鈥檛 the income tax rates just go up?
A: Yes, they went up to 11 percent last year because of a bill passed in 2017. Guess they鈥檙e itching to be top dog in state tax rates! Here鈥檚 another one. wants the counties to authorize construction of new housing units. It specifies new housing unit targets for each county.
Q: And what happens if a county misses its target?
A: Then its share of transient accommodation tax money is reduced by $1.03 million.
Q: Ouch!
A: But it can get the money back if it makes its goal the following fiscal year! And then, there鈥檚 . It would raise the transient accommodations tax on time share units.
Q: By how much would the tax go up?
A: I don鈥檛 know. The amount is blank now.
Q: So how do you know that the tax is going to be increased?
A: Because the first part of the bill says, 鈥渢he existing tax formula for time shares significantly underestimates the fair market value 鈥 and therefore often fails to assess taxes at a fair and proper rate.鈥
Q: Oh.
A: Wish us luck following the legislature this year! Woof!
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