LIHUE — The Kauai County Council has passed a bill adding a 3% surcharge to the state’s hotel tax after the state stopped sharing revenue from the tax with the counties.
Mayor Derek Kawakami plans to sign the legislation which is due to take effect on Oct. 1, said Sarah Blane, his chief of staff.
The county expects revenue from the tax to replace the roughly $15 million Kauai used to receive each year from its share of the state’s transient accommodation tax, The Garden Island newspaper reported Thursday.
The Maui County Council was scheduled to vote on a similar bill Friday.
The state for many years distributed a share of the revenue it collected from the 10.25% tax on hotel room stays and other short-term rentals to the counties but stopped doing so when the coronavirus pandemic squeezed its budget.
Lawmakers then passed legislation repealing the county allocation, but instead gave counties the authority to levy their own transient accommodations tax up to 3%
Kauai County has said it could expect about $6 million in revenue for every 1% of the tax.