ARDA and ARDA-ROC Fight Transient Occupancy Tax Increase in Hawaii


Issue Brief

Many jurisdictions have explored ways to generate revenue from timeshare owners and those who use timeshare exchange programs. Some elected officials have the perception that timeshare owners don’t pay their “fair share” of taxes, but even those that do realize the economic impact that timeshare brings to a destination find it easier to “tax the visitor and not the voter.” And Hawaii is currently the only state that taxes timeshare owners who occupy their own unit, or exchange guests that occupy a unit that was swapped with another owner.

One bill in Hawaii (Bill SB2489) seeks to amend the formula for the amount of transient accommodations tax collected from timeshares by increasing the base on which timeshare occupancy is taxed from one-half of the gross daily maintenance fees that are paid by the owner and are attributable to the timeshare unit to an increased amount to be determined by the legislature.


Timeshare owners already pay a number of taxes and fees related to their purchase and ongoing ownership obligations. Similar to a vacation home owner, timeshare owners pay – at a minimum – transfer taxes, recording fees, financing charges, maintenance fees and real property taxes. Additionally, if a timeshare owner decides to rent a timeshare unit, the rental is also subject to the same taxes as any other paid rental.

The ability to secure an exchange for a desired period of time and in a desired location is significantly affected by the desirability of the owner’s interval. Increased or new taxes on exchange or occupancy would reduce the attractiveness of those resorts for exchangers. Being subject to such excessive taxes would make it more difficult for an owner to secure the exchange of their choice.

Position/Call to Action

ARDA and ARDA-ROC firmly believe that the use of a timeshare unit by an owner or exchange guest should not be taxed like a rental, and oppose all efforts to impose such taxes on an occupancy that generates no revenues. Timeshare owners are comparable to the owners of second homes and should be taxed the same way.

Issue Updates

Bill SB2489 was introduced on January 19, 2018.