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Timeshare tax class bill moves to full council

LIHUE — The Kauai County Council may not create a new tax class for timeshare properties.

However, it is moving forward with a bill aimed at closing disparities and making taxes more equitable.

The council’s Committee on Finance and Economic Development voted 3-1 to pass Bill 2548 — which initially sought to create the new real property tax class — onto the full council.

But councilmembers said they plan to make amendments to the proposal once they take it up next week.

“I don’t like the idea of creating a ninth category because it makes them a target,” said Council Chair Jay Furfaro, who is not a committee member. “I am prepared to offer an amendment that does not create the ninth category but treats them as condominium values.”

Timeshares are currently taxed under the county’s hotel and resort class — a rate that is now set at $10.85 per $1,000 in assessed valuation. Condominiums, meanwhile, are taxed based on their use as homestead, residential or vacation rental properties.

County Finance Director Steve Hunt estimated switching timeshares to the condo-style valuation would generate about $4.5 million in additional revenue per year.

“That’s a pretty big chunk of change,” said Councilman Gary Hooser, who cast the lone dissenting vote and voiced concerns about supporting such a drastic increase.

Representatives of Lawai Beach Resort and Pono Kai Resort testified that while they are willing to pay their fair share, they are against a separate category and requested the change be phased in.

Noe Hookano, general manager at LBR, said the change would represent a 150 percent jump.

“We’re not against doing the increases at all, we just want to be able to phase it in so that it’s more manageable,” she said.

The full seven-member council is expected to take up the bill during its regular meeting Wednesday.

The Committee on Finance and Economic Development also voted Wednesday to defer for two weeks a bill aimed at taxing the island’s crop research land separate from other agricultural lands.

Introduced by Councilman Tim Bynum, Bill 2456 would establish “agronomics” as a new and separate real property tax class and exclude lands used primarily for crop research or parent seed production from the county’s definition of “agricultural use.”

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Chris D’Angelo, environment writer, can be reached at 245-0441 or cdangelo@thegardenisland.com.

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