Law increases county tax office efficiency

The Maui News
Editorial
Friday, May 20, 2005

While it was moving through the 2005 Legislature Senate Bill 1685 didn't make any waves, but if it is signed into law it should mean smoother sailing for Maui County's property tax office and individuals paying taxes.

Suggested by Mayor Alan Arakawa, pushed by Maui County Deputy Finance Director Wayne Fujita and introduced by Sens. Rosalyn Baker, J. Kalani English and Shan Tsutsui, SB 1685 allows the counties to access state tax records. Unbelievably, the counties were barred from cross-checking with state tax records even though other states and the federal government could.

Managing Director Keith Regan said checking with state income and business tax records would allow the county's 10 property tax appraisers to keep better track of 60,000 tax map key numbers on Maui.

Knowing reported income by a property owner can be used by the county's property tax office in several ways. It can be used to check on whether the transient accommodations tax is being paid on a residential property, which would affect its county classification. It can be used to verify applications for the circuit-breaker tax provision. It should also help clear up questions about homeowner exemptions when more than one address for the owner is reported.

The measure is, as Baker put it, an effort "to plug the tax leaks." Specifically, it levels the field for the vacation rental industry where some property owners may be claiming homeowner status while reaping short-term rental income.

In talking about SB 1685, Regan said there is no intention of targeting anyone, but simply to make sure property taxes are paid according to the use of the property. It will also help, he said, in clearing up disputes over claims for the property tax circuit-breaker, a measure intended to protect fixed-income owners from rising property taxes due to increased property valuations. The circuit-breaker limits property taxes to no more than 3 percent of the owner-occupant's income.

Government bureaucracies are not noted for efficiency but Senate Bill 1685 does offer the promise of more equitable taxing without the need for more manpower to police the tax laws. At this writing, Senate Bill 1685 was on the top floor of the State Capitol. Gov. Linda Lingle should sign it.

Copyright © 2005 The Maui News

Original article URL: http://www.mauinews.com/print_version.aspx?id=9005

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