Republican Hawaii governor Linda Lingle vetoed a bill to increase Hawaii’s hotel room tax rates by 1 percent, but the Democrat-controlled state legislature successfully voted to override her veto.
The current Transient Accommodations Tax is 7.25 percent per day. On July 1, that rate will increase to 8.25 percent. In July 2010 it will rise to 9.25 percent.
Members of the legislature, including Senate Ways and Means Committee chair Donna Mercado Kim, argued that the tax is necessary in order to close a $2.1 billion budget gap.
Lingle countered that Hawaii’s economy cannot recover from the current economic recession without a recovery in tourism.
“This bill is objectionable because an increase in the Transient Accommodations Tax will prolong our state’s ability to recover its economic vitality,” said Lingle.
Hawaii tourism liaison Marsha Wienert was one of many members of the Hawaii tourism industry who voiced their disapproval of the bill.
“Now is not the time to increase the transient accommodations tax,” said Wienert. “Our visitor industry is having a difficult time as it is convincing visitors to come.”
To help travel agents deal with the situation, Classic Vacations announced that it will automatically cover the additional cost associated with the tax increase for customers holding existing bookings and new bookings made through May 26.