Happy New Year! A New Year means new laws, and yes, Hawaii price increases. So let’s go over a couple that’ll affect visitors the most.
Price increases suck, but they’re a fact of life. Especially when government regulations are involved. And for Hawaii, there are two increases you’ll want to know about if you plan on visiting the islands.
Transient Accommodations Tax Increase
The price increase that’ll affect nearly everyone visiting Hawaii is the Transient Accommodations Tax increase. I discussed this a while back, but I’ll review it again because it’s been a while.
State-wide, the Transient Accommodations Tax increased by 1.00% on January 1, 2018. So instead of 9.25%, the new tax is 10.25%. Of course, to get your total room tax amount, you’ll need to add the General Excise Tax too. For Oahu, this taxi is 4.712%, while the rest of the state’s GET is 4.16%. This gives you an effective tax rate of 14.962% on Oahu and 14.41% on all other islands.
What this means in practice is that a room rate of $250 will result in a room tax of $37.70 on Oahu, while the tax on other islands will be $36.03. At 2017’s tax rates, the room tax would have been $34.91 and $33.79, respectively.
TheBus Fare Increase
If you’re visiting Oahu and planning on using public transit, Oahu’s bus system, TheBus has increased its fares and changed its fare structure. Effective January 1, 2018, TheBus adult fares went up $0.25 from $2.50 to $2.75. One-day passes have also increased from $5.00 to $5.50. And, if you didn’t already know, transfer passes were discontinued back on October 1, 2017.
Bonus: Seattle Soft Drink Surcharge
So, this isn’t Hawaii, but if you’re traveling to the Emerald City and want a (soft) drink, you’ll need to shell out an additional $0.0175 per fluid ounce. So for an average bottle of soda, you’ll see an effective price increase of about $0.17. This surcharge applies to sodas, energy drinks, sports drinks, fruit drinks, sweetened teas, and ready-to-drink coffee drinks. Excluded beverages include 100% fruit juices, infant formula, medicine, and milk-based products.
Hawaii Price Increases, Final Thoughts
In the grand scheme of things, the above price increases really aren’t that bad. The most significant one, the Transient Accommodations Tax will raise your nightly expense by about $2 to $3. But, I know an increase is an increase and either way it isn’t fun to have to pay, however, it could be worse.
One thing I didn’t mention, though, is there is another increase that could indirectly affect your Hawaii vacation. The State of Hawaii did raise its vehicle registration fees by $0.01 per pound. This means that the Toyota Camry you rented will cost the rental agency an extra $33 to register this year. Not a whole lot of difference, but still an amount that’ll likely get passed on to customers.
Communazis!
Sadly, all levels of government spend too freely and waste too easily. W hen will we reach the point where the final straw breaks the camel’s back? I find these type of tax increases egregious and unwarranted. As inflation creeps along, the price of hotel rooms increase and generate more tax revenue. I am not anti-government. However, the invisible taxes like sales taxes, hotel taxes, etc. are government’s best friend to the detriment of the citizenry.
No kidding, gm1. And in Hawaii’s case, the property tax is particularly egregious. Our officials keep talking about how we need to do something to ensure local residents can continue to purchase homes here. However, with so much demand and so little supply, land values have been soaring. And it doesn’t help that most new development is for luxury condos. So, last years Hawaii actually had negative population growth from so many people leaving the state. But will the government actually do anything about housing prices? Nope. The high land values mean more property taxes for them. And that room tax increase is to help fund a (needed) mass transit project that’s been very poorly managed.
Everybody talks about NY/NJ/CA getting devastated by the tax bill, but Hawaii might get hit harder than anyone.
Pat, I think we’re all equally troubled by the bill. Not being able to deduct mortgage interest on homes over, what was it? $700,000-ish is ridiculous in a state where the median price of a home is $800,000+. But, hey, who cares, right? It doesn’t affect the people that bill was written for.
Just to clarify, you won’t be able to deduct mortgage interest past the $750k valuation. So if you purchase a home for $1M, and put down 25%, the mortgage interest on your balance of $750k will be allowed to be deducted. Also, if your mortgage is over $750k, you will still be able to deduct the interest on the amount up to $750k.
Finally, this only applies to NEW mortgages.
Scott, this is true, but it still has HUGE ramifications for places like Hawaii, NYC, etc. Locally, economists are predicting the median price of a home to reach $1 million in 2020/2021. And that’s entirely plausible, as Hawaii’s housing shortage is severe. Experts are saying we need to construct 33,000 units by 2025 to meet current demands, though the current average number of units being built annually is about 3,000 and slowing. Not to mention, much of the new condo construction in Honolulu’s urban core is of the luxury variety, most of which already start at over $1 million. Of course, this is translating into very real issues for the state, such as negative population growth and brain drain. And while I know the mortgage-related portion of the tax bill doesn’t make a huge difference to this situation, it’s still a negative difference all the same. There should have been exceptions written into the bill to account for situations such as this.