Aulani and "TRANSIENT ACCOMMODATIONS TAX"...

[DisWitt]

Yea I don't know what hotel you were looking at, but if you want to compare Apples to Apples try pricing something at the "JW Marriott Ihilani Ko Olina Resort & Spa" since it is right next door to Aulani. I can get a better rate at All Star Movies but it is not the same as AKV! So lets compare a couple different seasons:

Adventrue Season (Studio) 2nd week in Jan:
Aulani - Standard View 18pts ($180) / Ocean View 25pts ($250)
Ihilani - Standard View $286 / Ocean View $328
(This is with the Marriott Rewards Discount)

Premiere Season (Studio) Last week in Dec:
Aulani - Standard View 24pts ($240) / Ocean View 31pts ($310)
Ihilani - Standard View $369 / Ocean View $419
(No Marriott Rewards Price Available but if it were it would probably be $20-$40 off)

TOTALLY TRUE! My family has been staying at the Royal Hawaiian on Oahu for 75+ years. The absolute cheapest price that we can get for a STANDARD room (inside garden view) during the lowest season with our "we know the right people discount" is $2500+/week. That's the rock-bottom price and it's STILL way higher than the Aulani... and the Aulani will be much more fun for our kids than the Pink Palace (as much as I love the Royal).

 

[rparmfamily]

TOTALLY TRUE! My family has been staying at the Royal Hawaiian on Oahu for 75+ years. The absolute cheapest price that we can get for a STANDARD room (inside garden view) during the lowest season with our "we know the right people discount" is $2500+/week. That's the rock-bottom price and it's STILL way higher than the Aulani... and the Aulani will be much more fun for our kids than the Pink Palace (as much as I love the Royal).

Going OT...but the Royal Hawaiian is just gorgeous. Love the remodel!

Back on OT...there isn't anything like Aulani on O'ahu. The HHV has a neat pool/slide area now, by the lagoon, but then it's down in Waikiki and the pool area hardly gets any sun because of the buildings. No relaxing ocean views...you hear sirens and traffic and honking and the waves all at once. It's very pretty down there but it's not how Aulani is. Though at Aulani you will hear the airplanes off and on thru the day, as they make their approach to HNL. Aulani will be more of what is offered by resorts on the other islands...a fully encompassing resort.

 

[CrazyDuck]

Going OT...but the Royal Hawaiian is just gorgeous. Love the remodel!

Back on OT...there isn't anything like Aulani on O'ahu. The HHV has a neat pool/slide area now, by the lagoon, but then it's down in Waikiki and the pool area hardly gets any sun because of the buildings. No relaxing ocean views...you hear sirens and traffic and honking and the waves all at once. It's very pretty down there but it's not how Aulani is. Though at Aulani you will hear the airplanes off and on thru the day, as they make their approach to HNL. Aulani will be more of what is offered by resorts on the other islands...a fully encompassing resort.

As far as water activities go, I think the closest you will get to Aulani in Hawaii is the Grand Hyatt Poipu Beach on Kauai. They have a huge pool, a water slide, a big salt water pool, and a lazy river. It is my favorite hotel in Hawaii! (We'll have to see about Aulani when it's done)

 

[pilferk]

Here is the following Paragraph... I will add "()" to clarify the parties:

So why should they "roll-up" the Transient Accommodation Tax into the Aulani Owners' Dues if they are not always liable for that tax? Do you like paying taxes that you don't owe? If so I'll gladly send you my $6,000 bil from Uncle Sam!

Because, if you read the entire paragraph you're quoting, they're referring to a very specific example.

And, again, from reading the law, itself, the paragraphs being referenced seem to be more of a way to protect the owner from a plan manager assessing the tax AFTER the fact.

It doesn't seem to preclude rolling the tax up to maintenance fees. tjkraz's FAQ would seem to give the impression that you can't, but the way the actual law is written (and then explained) in Chuck's link, it doesn't seem to preclude the inclusion in maint fees (like property taxes), so long as that item is included in the POS.

I haven't made it through the rest of the responses, but I haven't seen a legal explanation, yet, that would lead me to believe they can't. I could certainly be misreading or misunderstanding it...but I need something more concrete to sway me.

As for why: Because ultimately, the DVC Association IS liable for the taxes (whether they collect them or not), and the Association is an agent of the ownership. You're not, really, paying taxes you don't owe, or, rather, that you're not liable for. You're just paying them differently...instead of having the person USING the room pay the tax, at the time of use, you're pre-paying that amount FOR the person who will be using the room. You can then either collect it from your tenant as part of the rental (leading to an increase in per point rental price), give it to them as an act of kindness (as you would if you were having a relative use your points), or you'd be pre-paying it for yourself. It would be an expense, like property taxes, pool maintenance, etc.

 

[pilferk]

I happen to know one of the Disney lawyers. The guy is tops in the field (the reason why you don't hear about Disney lawsuits every day), paid a ton of $, and fights like a gila monster (look it up). If there was an easier way of taking care of TAT -- and rolling it into MF's would be far easier way than collecting it from every guest -- they would be doing that!

See, I'm not so sure it is easier. It would be easier, probably, for the owners. I'm not sure it would be easier for DISNEY, in terms of accounting. There are a host of issues with doing it that way, including the fact you'd have to assume 100% occupancy, and assess the tax based on that. Which would mean an overage (like there is with property taxes) that would likely accumulate year after year.

In addition, you'd have to differentiate between cash guests and points guest, and when/where to assess the tax between the two.

And that's just a couple of the hurdles. I'm sure there are others.

So, in the end...."easier" might be relative. They might be ABLE to do it, legally (I'm still not sure). They might not WANT to do it, operationally.

 

[pilferk]

If the tax rate increased and the tax was included in dues, dues would increase. But, remember that legally, the DVC dues have to reflect actual resort operating expenses. And under Hawaii law, the tax is tied to the actual, physical use of the resort. If an Aulani owner never uses their points there, they are not physically using the resort, and no taxes would be due from the owner to the state. But owners that trade in, either from other DVCs or through RCI are physically using the resort, that is why the tax is charged to the room user. I doubt it would be legal to roll those fees into the annual dues for Aulani. The Aulani owners could probably challenge it in court if they did.

READING the law doesn't seem to indicate that. They could challenge it on "spirit", and they might very well win, but the wording is ambiguous, IMHO. It reads more like Hawaii's way to protect the owner from abuse by the plan manager (the liable party).

As for the DVC dues...they do a similar thing with property tax, and then credit back the difference to the following years dues. You'd assume they could (if it was legal according to Hawaii state law) do the same with the TAT. The problem would be what occupancy % to assume, so that the Association isn't left holding the bag and/or an ongoing, increasing credit balance doesn't begin to run.

There are operational hurdles, too. I mentioned a couple, you mention a couple more. I think, at the end of the day, doing it would be a headache...which might be more the reason behind Disney NOT doing it.

 

[pilferk]

Here is the following Paragraph... I will add "()" to clarify the parties:



So why should they "roll-up" the Transient Accommodation Tax into the Aulani Owners' Dues if they are not always liable for that tax? Do you like paying taxes that you don't owe? If so I'll gladly send you my $6,000 bil from Uncle Sam!

And, another interesting tidbit (from the FAQ tjkraz posted), on what happens if you rent your timeshare:

However, since you received rental income from the rental unit for 7 days, you must be license under both the Transient Accommodations Law and the General Excise tax law. You must pay to the state the transient accommodations tax at the rate of 7.25 percent on the gross rental or the gross rental proceeds derived from furnishing transient accommodations (the time share unit) and report the transient accommodations tax on the regular transient accommodations tax return. Since you are subject to the transient accommodations tax for the 7 days the unit was rented, the plan manager shall not be liable for the transient accommodations tax on time share occupancy for those 7 days.

Now, DVC is not strictly an interval-type timeshare (though the fixed week option might be considered one), so things may very well need to be structured differently. But I'm not sure that DVC wouldn't be held to the same language.

 

[Greysword]

Despite the discussion outcome, I want to thank the OP for pointing out this bit of info. I can see how this would be a surprise for many, and thanks to the DIS, we now know!

However, I can se the ranting at the front desk now about the fee.... "I spent blahty blah blah dollars on this membership and I'm not going to pay...blahty blah!"

 

[dianeschlicht]

I was thinking the same thing. I have already paid top $$$ for my DVC and was told that no other fees would be charged, and then I see this. If Hawaii charges the tax for the "standard" time shares and other resort stays that is one thing, but I do not consider ours a time share, rather it is a Vacation Club and is quite different. And like I said, when we purchased, we were told we would not be charged "any resort taxes" by our guide.

Too bad, Aulani looks beautiful.

Sorry, but your opinion and the truth differ a bit. Not only is DVC a timeshare, but it is also a hotel type accommodation where guests stay away from home. Timeshares are not really treated any differently than other hotel guests in Hawaii. ALL people who are transient pay that same tax. It's just based on the value, and if you spend more, you pay more in tax. This is NOT a DVC problem. If you want to blame anyone, blame the state of Hawaii.

 

[rparmfamily]

We stayed the weekend it opened...the tax wasn't much, like $7 a day or so.

 

[mkymsehi]

We stayed this last Saturday in a studio, using our DVC points. The hotel transient tax was $2.97. I was expecting it to be about $10 from looking at a Hawaii State tax form online. I was pleasantly surprised it was so cheap.

BTW- if your staying on your own member points, parking for two cars is FREE. Just show your room key and DVC member card to the valet, and they will validate your self parking receipt.

Staying on rented points, or on a regular room reservation, pay $35 a night for parking. Visiting for a short while, it's $10 an hour. Or simply spend $35 on food, drink, or merchandise for free validation. Valet is the same prices, plus tip.

So while everyone is worried about paying a few bucks for the Hawaii hotel transient tax, don't be pissed about the parking fees, because you were warned here! LOL.

I could also tell you about the meal prices, but I'll save that for another day or another thread. LOL.

 

[YourEveryDayAdam]

It doesn't seem to preclude rolling the tax up to maintenance fees. tjkraz's FAQ would seem to give the impression that you can't, but the way the actual law is written (and then explained) in Chuck's link, it doesn't seem to preclude the inclusion in maint fees (like property taxes), so long as that item is included in the POS.

Actually, yes the law DOES preclude being able to rolling the tax up in to the maintenance fees. Here is a quote from the Chuck's link:

(2) 7.25 per cent on the unit’s “fair market rental value” for the period beginning on January 1, 1999, and thereafter. The tax shall be assessed and collected each month on the occupant of a resort time share vacation unit. Every time share plan manager shall be liable for and pay to the department the transient accommodations tax. If a time share unit is rented, the plan manager shall be liable for the transient accommodations tax on the unit’s “fair market rental value” under section 237D- 2(c) and (d), HRS.

I went ahead and bolded the important section. Basically the law states, quite explicitly, that the person who is assessed the tax is the occupant of the unit. This is NOT necessarily the OWNER of the unit. Since DVC units are quite frequently traded out to other resorts (either through a time share trade system, other DVC properties, cruises, etc.), it would be impossible to collect the tax through dues.

The sections you highlighted just say that the manager of the property is responsible to collect and remit the taxes to the state. It gives the state the power to go after the property manager if, for some reason, the state doesn't get the money. It lets the state go after one person/organization if the tax doesn't get paid and not have to go after each individual person staying for each individual week in each individual unit...This is basically similar to a state sales tax that says that the person being taxed is the person who buys something in a store, but the store is responsible for collecting the tax and sending it to the state... In this case, the person staying at the resort is the one being taxed and the resort is responsible for collecting the tax and sending it to the state.

IF DVC did collect the tax through dues, then it would be an open-and-shut class action against DVCMC for any owners of Aulani who used their points for ANYTHING other than staying at Aulani. So, DVCMC would end up having to reimburse those members for the taxes that they paid through their dues but weren't responsible for...DVCMC would then have to go back and try to collect the tax on everyone who stayed there. Also, since DVCMC is ultimately responsible for sending the tax to the state, any taxes they couldn't go back and successfully collect, they would end up being responsible for paying.

 

[crisi]

That phrase also precludes using dues since dues are annual and the wording of the law specifies a monthly collection of tax.

 

[pilferk]

Actually, yes the law DOES preclude being able to rolling the tax up in to the maintenance fees. Here is a quote from the Chuck's link:
I went ahead and bolded the important section. Basically the law states, quite explicitly, that the person who is assessed the tax is the occupant of the unit. This is NOT necessarily the OWNER of the unit. Since DVC units are quite frequently traded out to other resorts (either through a time share trade system, other DVC properties, cruises, etc.), it would be impossible to collect the tax through dues.

And I'll bold the important enforcement text:

(2) 7.25 per cent on the unit’s “fair market rental value” for the period beginning on January 1, 1999, and thereafter. The tax shall be assessed and collected each month on the occupant of a resort time share vacation unit. Every time share plan manager shall be liable for and pay to the department the transient accommodations tax. If a time share unit is rented, the plan manager shall be liable for the transient accommodations tax on the unit’s “fair market rental value” under section 237D- 2(c) and (d), HRS.

It lays out WHO the tax can be collected from (giving the owne/plan managerr a way to assess a charge), but it clearly states who is LIABLE for paying it. Not the occupant.

If the occupant skips out on the tax, or you choose not to charge them, or you undercharge them, or whatever...the State will pursue the owner/plan manager NOT the occupant. The owner would have legal recourse to get that money back (if they want it), since the charge is allowed by state law...but THEY would be responsible for reclaiming that money. NOT the state.

The sections you highlighted just say that the manager of the property is responsible to collect and remit the taxes to the state. It gives the state the power to go after the property manager if, for some reason, the state doesn't get the money. It lets the state go after one person/organization if the tax doesn't get paid and not have to go after each individual person staying for each individual week in each individual unit...This is basically similar to a state sales tax that says that the person being taxed is the person who buys something in a store, but the store is responsible for collecting the tax and sending it to the state... In this case, the person staying at the resort is the one being taxed and the resort is responsible for collecting the tax and sending it to the state.

Liability clearly means who is expected to remit/pay to the state. In legal language, it means the owner/plan manager is the one responsible, LEGALLY. The occupant is not specified as being liable....which means there is no method for enforcing the collection from a specific tenant by law....though it allows the plan manager/owner to levy an enforceable charge (and non-payment would be theft). As I said in my original post (which, FYI, is over a year old): The language is ambiguous and could be challenged in court.

With our (CT) state tax law, the person buying the merch is LIABLE for the tax (on anything bought and DELIVERED to CT).

IF DVC did collect the tax through dues, then it would be an open-and-shut class action against DVCMC for any owners of Aulani who used their points for ANYTHING other than staying at Aulani. So, DVCMC would end up having to reimburse those members for the taxes that they paid through their dues but weren't responsible for...DVCMC would then have to go back and try to collect the tax on everyone who stayed there. Also, since DVCMC is ultimately responsible for sending the tax to the state, any taxes they couldn't go back and successfully collect, they would end up being responsible for paying.

Not true, if the use and assessment were clearly laid out in the POS.

If you use your points for "something else"...you're not, really. You're essentially TRADING those points for something else. SOMEONE will be occupying your "points" at Aulani, while you use "someone else's" points at another resort. There WILL be an occupant using your points...maybe just not you. Since you, ultimately, "own" the points being used....

To be clear: I'm not saying the above interpretation is what the State of Hawaii intended. Only that it's POSSIBLE, given the language, to make the argument. I doubt anyone will fight it in court. And there would be operational hurdles that would preclude DVC from going in this direction. But the language is NOT clear cut....it's open for some interpretation. And that's not just MY opinion. I had, at the time, a couple of the legal professors "on campus" at my workplace take a look at it, on a lark. They both agreed....it would be open for a court challenge...that would likely result in the state legislature rewording the law to be more specific about liability and collection.

 

[pilferk]

That phrase also precludes using dues since dues are annual and the wording of the law specifies a monthly collection of tax.

It means the owner/plan manger has to REMIT the tax for use that happens during each previous month.

It does not mean that tax has to be PAID, by an occupant, that month.

Here's an easy (and simplified) example:

If you stay at Aulani from Sept 28th - Oct 5th...you are paying, to the plan manager, your occupancy tax on Oct 5th upon checkout. The charge is probably assessed, daily...but it's not COLLECTED daily.

However, technically....your Occupancy tax for Sept 28th-Sept 30th were "due" Oct 1st.

The plan manager is paying those taxes, because they are liable for them, potentially before they're actually collected from the occupant.

 

[tjkraz]

As I said in my original post (which, FYI, is over a year old): The language is ambiguous and could be challenged in court.

There may be inconsistencies between different sections of the law and even FAQs issued by the state. But it seems to me that DVC has chosen the path of least resistance...the option which most readily satisfies regulators.

Investing time and member dues in challenging Hawaii law strikes me as a frivolous pursuit.

 

[pilferk]

There may be inconsistencies between different sections of the law and even FAQs issued by the state. But it seems to me that DVC has chosen the path of least resistance...the option which most readily satisfies regulators.

Investing time and member dues in challenging Hawaii law strikes me as a frivolous pursuit.

Agree, 100%.

I said that in another post (again...about a year ago): This path is likely the easiest for DVC...especially when any lawsuit would likely just result in a reword/revote at the state level which would quickly "fix" the language. Certainly not worth the legal costs or operational headaches trying to challenge the law would bring.

I don't think DVC SHOULD challenge it. The point was only that they probably COULD.

 

[mkymsehi]

Disney raises Aulani time-share fees

The state approves the firm's adjustment, made after executives underestimated costs

Walt Disney Co. received state approval last week to resume time-share sales in Hawaii with higher annual fees at its new Aulani resort in West Oahu.

The resumption occurred following Disney's decision to halt sales July 15 after realizing that it had significantly underestimated annual fees assessed to unit purchasers.

Disney recently raised the annual fee 33 percent, but needed regulatory approval of a disclosure document provided to prospective buyers. The state Department of Commerce and Consumer Affairs approved the disclosure document Thursday.

Disney will need similar approvals in other states, but resumed sales in Hawaii.

A Disney spokeswoman would not comment on the impact the temporary suspension or the higher fees have had on buyer demand. Disney is not disclosing sales figures.

Aulani opened Aug. 29 at Ko Olina Resort & Marina.

The company began selling time-share units at Aulani in July 2010. Disney said it will pay the difference between its original estimate and restated fee in perpetuity for buyers who completed purchases prior to July 15.
Disney continued to take nonbinding reservations for Aulani time shares after July 15 but was prevented from closing any sales until it had an approved disclosure statement with the higher annual fee amount.

Annual fees are based on the number of points it takes to buy a time share at Aulani. The new rate is $5.73 per point, up from an original $4.31 per point. The higher fee equates to between $722 and $7,380 a year depending on the time of year and unit size and view.

Purchase prices for a time-share unit based on an annual week's stay at Aulani range from $15,120 to $154,560. Purchase prices weren't adjusted.
Disney stands to take in about $1.2 billion from Aulani time-share sales based on estimates of 25,000 one-week interests at the project, which has 481 time-share units.

That excludes annual dues, which can be adjusted from year to year and are designed so that time-share buyers pay for operating expenses such as housekeeping, utilities and maintenance as well as insurance, taxes and a Disney management fee.

Disney's initial mistake estimating operating expenses led to the firing of three executives, including time-share division President Jim Lewis and two other high-ranking executives who previously worked under Lewis, according to The New York Times.

Disney officials declined to talk about the departures, citing a policy of not commenting on personnel matters.

 

[nuts]

This tax is the second biggest reason I will probably never stay there.

Really? You will let a $35 charge keep you from enjoying one of Disney's premier resorts?

 

[kjd469]

I think the people who are saying they wouldn't stay at Aulani because of the transient tax were never going to go there anyways...jmho. I really think, that if you can afford to purchase at Aulani, buy your flights, etc., etc. you are really not gonna get all upset about a relatively small charge upon checkout, that I know we personally were informed of right from the beginning before we signed our contract. I really don't get what the big deal is.