Posted on: Friday, March 23, 2001

Tax amount set for wholesalers

Advertiser Staff and News Services

Wholesale tour operators would be charged $7.25 for every room they purchase from Hawai'i hotels, according to a Senate committee's version of a controversial rooms tax bill. The Senate Tourism and Intergovernmental Affairs Committee yesterday refined a bill that would have applied the state's 7.25 percent hotel rooms tax to the markup that wholesalers put on the lodging part of package tours they sell.

Wholesalers buy large blocks of rooms from hotels, often at discount, and sell them in packages to the retail market. The industry said it would be difficult to determine the markup on any single component of a package.

The committee voted yesterday to charge the wholesalers 7.25 percent on $100 for every room they purchase from local hotels, said Julie Hugo, staff aide to committee member Sen. Kalani English, D-5th (Wailuku, Kahului, Upcountry).

The measure now goes to the Senate Ways and Means committee.