Well, it’s official.  The "Islands of Aloha" just became the "Islands of…eh…I can probably find a better deal in Puerto Rico."

As expected, the Hawaii Legislature last week overrode Governor Linda Lingle’s vetoes of income, hotel, property sales, and smokeless tobacco tax increases.  The move followed a public ceremony and tax rally with Gov. Lingle on May 7 for citizens to watch her veto the four tax hikes.
While ATR applauds Governor Lingle, a Taxpayer Protection Pledge signer, for vetoing these oneorus tax hikes, the Governor wrongly signed HB 1175 into law, which increases the tax on cigarettes to $3 per pack.  Click here, here, and here for letters to Gov. Lingle urging her to keep her Pledge.
In addition to higher tobacco taxes, here’s a look at some of the other new taxes citizens, visitors, and businesses will enjoy:
  • SB 1111 increases hotel tax occupancy tax by 28%. This is an especially good idea given that Hawaii’s tourism industry is already suffering.  What better way to continue to discourage tourists to spend their money in Hawaii than making accommodations more expensive?
  • HB 1747 increases the top income rate to 11% – now the highest in the nation.  This tax increase will be imposed on individuals and about 37,000 small-business owners in Hawaii, arguably the backbone of the Hawaiian economy.
  • HB 1741 raises the tax on sales of property and second home purchases.  Apparently, now is not the time to buy or sell in Hawaii.
Additionally, ATR commends Taxpayer Protection Pledge signers Representative Cynthia Thielen and Senator Fred Hemmings for reversing their stance on HB 895 and voting to sustain Governor Lingle’s veto of all of these tax increases.  The reversals came after ATR sent letters to Rep. Cynthia Thielen, Rep. Corrine Ching, Sen. David Ige, and Sen. Fred Hemmings urging them to uphold their Taxpayer Protection Pledge and oppose the veto overrides.  All four legislators originally voted in favor of a higher tax on smokeless tobacco.  Also, click here for ATR’s letter to the entire legislature opposing a veto override.
(photo by photolulu)