Aulani -- Need some info from someone who has stayed already

[LouisianaDisneyFan]

Hi all, we purchased Aulani on the day sales began. Another DVC'er stayed on our points during opening week. I now have been asked if we complied with Hawaii's General Excise Tax Law, specifically HRS Chapter 237D. This section discusses the Transient Accommodations Tax. We were told when we purchased our Aulani points that we would be charged this tax at check-in or check-out... but I do not know for sure if Tracy paid this tax or not. Can someone who has already stayed please tell me if the tax was or was not charged as part of your room bill? If so, about how much is the tax? Also, if you have allowed someone else to use your points for a stay, do you owe an additional tax for some reason?

Thanks for any info! -Evey =)

 

[wdrl]

I've read some Aulani trip report threads here on the disboards where people have reported paying the Transient Accommodations Tax on their DVC stays. The tax was collected by the front desk. The tax rate was based on the original maintenance fee amount of $4.31. I've yet to hear if anyone is being charged a tax amount based on the revised MF of $5.73. The TAT comes out to $0.2077 per point with the revised MF, and slightly less with the original MF.

By State law, the TAT is collected from the person occupying the room. It is not collected from the actual owner of the points.

Here is some more info on the TAT: http://www.dvcnews.com/index.php/resorts/aulani-villas/faqs

 

[LouisianaDisneyFan]

I've read some Aulani trip report threads here on the disboards where people have reported paying the Transient Accommodations Tax on their DVC stays. The tax was collected by the front desk. The tax rate was based on the original maintenance fee amount of $4.31. I've yet to hear if anyone is being charged a tax amount based on the revised MF of $5.73. The TAT comes out to $0.2077 per point with the revised MF, and slightly less with the original MF.

By State law, the TAT is collected from the person occupying the room. It is not collected from the actual owner of the points.

Here is some more info on the TAT: http://www.dvcnews.com/index.php/resorts/aulani-villas/faqs

Thanks for the reply. If I'm reading this law correctly, when/if an owner rents their points for more than the MF's, then they are responsible for paying the transient tax on the difference between the MFs (for which the Aulani front desk has already collected the tax) and the actual rental amount. Failure to pay the tax on the full value of the rental is prosecutable by the State of Hawaii. I guess that's a caveat to all who might rent their points for this resort. However, I have no idea how an individual owner could file to pay the amount of tax due, or what paperwork would be required to show that part of it has already been collected by Disney.

Any ideas?

 

[wdrl]

Thanks for the reply. If I'm reading this law correctly, when/if an owner rents their points for more than the MF's, then they are responsible for paying the transient tax on the difference between the MFs (for which the Aulani front desk has already collected the tax) and the actual rental amount. Failure to pay the tax on the full value of the rental is prosecutable by the State of Hawaii. I guess that's a caveat to all who might rent their points for this resort. However, I have no idea how an individual owner could file to pay the amount of tax due, or what paperwork would be required to show that part of it has already been collected by Disney.

Any ideas?

I finally found a thread where some Aulani guest posted about paying the TAT. See http://www.disboards.com/showthread.php?t=2539037&page=5, posts #61 - #64.

Frankly, I doubt the State of Hawaii has the resources to track down and collect the tax on the difference between the MF rate and the actual rental amount. In a year's time the aggregate amount might be quite substantial, but the State would have to collect the tax from hundreds of individuals. And that is assuming it can accurately compute the tax difference and support its findings if an individual disputes it.

If you plan on renting out your points, just advise your renter that they should expect to pay the TAT at check in. Once the 2012 MFs are agreed upon at the Annual Meeting, DVC should publish a new TAT rate chart reflecting the 2012 MF within a few weeks.

By the way: I have yet to hear if DVD plans on subsidizing the TAT for the "original" Aulani owners, letting them pay a tax amount based on the $4.31 MF amount. Have you heard anything?



Good luck!

 

[LouisianaDisneyFan]

Update: I just found some troubling information. When we purchased our points, we were definitely grossly misinformed about how "easy" it would be to rent our points if we had a year where we couldn't travel. The State of Hawaii posted the following information on their website with regard to receiving rental income:

"...you must be licensed under both the Transient Accommodations Tax 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 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 days that the time share was rented, the plan manager [Disney DVC] shall not be liable for the transient accommodations tax on occupancy for those days. You must also pay the State the general excise tax at the rate of 4 percent on the gross income derived from the rental of the time share unit."

Whoa, that seems like a LOT of trouble to rent points during years you can't travel. I think it's time for hubby and me to rescind this purchase (per the Disney buyback offer to original owners).

Here's a link to the webpage with the info: http://www.state.hi.us/tax/taxfacts/tf98-04.pdf

 

[LouisianaDisneyFan]

Update 2: I went ahead and called Taxpayer Services in Hawaii (toll-free number is posted on their site). Here's the form you need to fill out if you want to rent points: http://www6.hawaii.gov/tax/2010/bb1packet.pdf

According to the agent who helped me, filling out that form would allow an owner to rent between 1-5 units. The cost to be licensed for both the TAT and the General Excise Tax is $25.00 (combined).

 

[spleen]

I wonder how the state of Hawaii would know whether you rented your points out versus gifted those points to rent a stay for a friend/relative? I think this counts as one of those things that you're "supposed" to do - and if you're someone who commercially rents out timeshares, that's one thing. But for someone who rents out once a year or something? Probably unlikely to happen and nearly impossible to enforce.

Sort of like the state sales tax that we all are supposed to paying for our Internet purchases. We're supposed to be figuring out on our own what the state sales tax is for our purchases from Amazon and the like and submitting a check to the state tax board for that amount ...

 

[darby888]

For our recent stay in an island view studio, our daily room tax was $4.51.

 

[LouisianaDisneyFan]

Thanks for the feedback everyone.

We did go ahead and complete the paperwork with the State of Hawaii to legally rent points. We haven't received our license and tax id back from them yet, but it's better to have a little headache now rather than the potential of a bigger one later. I think it's very irresponsible of the Disney sales team to omit this information during the Aulani sales pitch. When we asked a direct question about options during years we could not travel, we were distinctly told that renting our Aulani points would work just like renting our BWV and BLT points. That is untrue. I'm not suggesting that the sales team must become tax advisers, but I believe they have a duty to provide ACCURATE answers when members ask a specific question... rather than providing whatever answer will help close the sale.

 

[Cruelladeville]

You should have said you had gifted your points to your friend. I am thinking that you made this more difficult than it had to be, unless you are planning to rent points every year. If you are planning to continue renting out points to Aulani, then you acted appropriately. Give yourself a pat on the back for being totally honest when, I admit, I would have let it slide.

 

[DisWitt]

I'm thinking that this isn't an issue for you IF you transferred the points to another DVC owner. The points then go into their account for use at ANY DVC resort. Thus, they aren't specifically Hawaii points until they are actually used for accommodation.

Furthermore, I'm surprised that you went this far with it. Weston, Marriott, and other point-system owners who have Hawaii-based TS's do not pay inflated tax on their rental but allow the front desk to collect the TAT per regulations.

 

[taysmom]

Hi all, we purchased Aulani on the day sales began. Another DVC'er stayed on our points during opening week. I now have been asked if we complied with Hawaii's General Excise Tax Law, specifically HRS Chapter 237D. This section discusses the Transient Accommodations Tax. We were told when we purchased our Aulani points that we would be charged this tax at check-in or check-out... but I do not know for sure if Tracy paid this tax or not. Can someone who has already stayed please tell me if the tax was or was not charged as part of your room bill? If so, about how much is the tax? Also, if you have allowed someone else to use your points for a stay, do you owe an additional tax for some reason?

Thanks for any info! -Evey =)

We stayed over thanksgiving and they charged the tax the first day. They asked if I wanted it charged on the credit card on account or pay cash. I just charged it to the room.

 

[LouisianaDisneyFan]

I'm thinking that this isn't an issue for you IF you transferred the points to another DVC owner. The points then go into their account for use at ANY DVC resort. Thus, they aren't specifically Hawaii points until they are actually used for accommodation.

Furthermore, I'm surprised that you went this far with it. Weston, Marriott, and other point-system owners who have Hawaii-based TS's do not pay inflated tax on their rental but allow the front desk to collect the TAT per regulations.

Did you read through the law that I linked above? The language of the law is very clear... the front desk (or more specifically, the TS manager) is only supposed to be collecting the TAT IF the actual guest using the accommodations is an owner. In cases where the owner has made any arrangement that involved an exchange of something of value, then the TAT is supposed to be collected by that owner from the guest and paid to the State of Hawaii. If an owner has rented their points, they would pay the TAT based on the cash rental. If an owner has traded their points for something else of value, say for points at another resort, then that owner is supposed to collect the TAT from the guest based on the value of what was received (i.e., the fair market value of the points at the other resort) and this tax is supposed to be paid to the State of Hawaii. The tax is due whether what was received in exchange for your points is in Hawaii or not... because the transient accommodations (Aulani) ARE located in Hawaii. The law is also fairly thorough, spelling out numerous examples (including trading, gifting, renting for cash, etc.).

You did suggest a loophole that isn't specifically addressed in the law... and one that I think we will utilize if we find ourselves with extra Aulani points in the future. If an Aulani owner transfers their points to another DVC owner, then the new owner of those points would be responsible for whatever transactions took place. That sounds like the safest way to go... offer the points for transfer only.

Bottom line for this year's points, now that we do know about the law, we feel obligated to adhere to it... whether other folks do or not. Paying $25 to get a license and paying the appropriate taxes when due is a small price for a clear conscience.