Council seeks tax panel’s input

A bill creating new tax classifications for Oahu bed-and-breakfast operations and transient vacation units has been deferred so a panel of experts can review it.

Bill 23 was one of three tax-related measures held up by the Council Budget Committee on Wednesday. Also deferred were Bill 18, increasing the minimum property tax for nonprofits and public service groups, and Bill 19, creating a tiered tax system for residential properties designated as historic.

Council Budget Chairwoman Ann Koba­ya­shi said she wants a property tax advisory commission, which is expected to convene soon, to offer recommendations on the bills. After Wednesday’s meeting she said her committee could revisit any or all of the bills before completing the city budget in May.

Bed-and-breakfast operations and transient vacation units are now taxed under the residential classification, and there is broad sentiment among Council members and others that they should be taxed more like businesses.

Lisa Maruyama, president of the Hawaii Alliance of Nonprofit Organizations, testified against Bill 18’s proposed hike in the current minimum tax to $400 from $300 for nonprofits and public service groups. Many are already operating with little financial wiggle room, she said.

Historic properties now are all taxed the minimum $300, but Deputy Budget Director Gary Kuro­kawa said a tiered system would create inequities and "would be difficult to implement."