Monday, December 17, 2018
Hawai'i Free Press

Current Articles | Archives

Monday, November 26, 2018
The County Strikes Back (part 1)
By Tom Yamachika @ 2:03 PM :: 634 Views :: Maui County, Taxes, Tourism

The County Strikes Back (part 1)

by Tom Yamachika, President, Tax Foundation Hawaii

This week we begin a series on a long and hotly litigated property tax case from Maui. This case isn’t about wind turbines like we wrote about a couple of weeks ago. This one involves timeshares.

Some timeshare projects in Kaanapali were unhappy when Maui County enacted in 2004 a new Time Share property classification, effective in 2006, that was much more expensive for impacted taxpayers. In 2013, the associations sued in Circuit Court on Maui asking for the court to declare that the Time Share classification was invalid.

Maui’s eagle-eyed attorneys and tax assessors then noticed something interesting. For the years 2006, 2007, and 2008, they had assessed the master projects, such as the land and buildings on the whole condominium project, as opposed to individual time share interests (typically, ownership of a certain unit for a week per year). And the property was assessed using cost data, which is typically used for projects being constructed, rather than market data. The county, claiming it had a right to charge tax on “omitted property” that wasn’t taxed before, then set up a counterclaim in the lawsuit for $10 million in additional property tax owed for 2006, 2007, and 2008.

The timeshares moved to have the counterclaim tossed out. “There’s a process for assessing tax and you didn’t follow it,” they said, and the judge agreed. “We’ll fix that,” the county said, and issued “amended property tax assessments” to every timeshare unit owner in the projects, in order to give those owners some credit for the tax that had been paid on the master parcels. (But wait. Isn’t there something weird about issuing “amended” assessments on what they claim is “omitted property” that hasn’t been assessed before?) The total of the 1,111 amended assessments was $10 million, due and payable in 30 days.

The timeshares somehow scraped up the money to pay the assessments and appealed all the amended assessments. The filing fees for the appeals totaled more than $80,000. The timeshares had to raise their $10 million through special assessments, which, unlike maintenance fees charged by non-timeshare condominium associations, are GET taxable. Another $300K+ was sent down the tubes.

Now, Maui isn’t that big of an island. Word of the massive assessments got out, and let’s just say that other people were concerned. “You don’t have to worry,” county officials said, in effect. “We only assessed these folks retroactively because they were making a huge and questionable claim against the county and they didn’t pay their fair share of tax in prior years.” Which easily could be read as, “These suckers had the nerve to sue us. So, we are going to pound the stuffing out of them. Government-fearing citizens need not be afraid.”

This was way too much for the trial judge. He ruled that the supplemental assessments were all void because the county didn’t follow proper assessment procedure and that it wasn’t lawful for the county to reach back for so many years. The judge found that the county retaliated against the timeshares for suing them, which violated many of the timeshares’ constitutional rights. Thus, the timeshares were entitled to damages and attorneys’ fees under federal civil rights law. And, for good measure, the judge ruled the Time Share property tax classification on Maui invalid since inception, which would give the suing timeshares the right to a $30 million refund of overpaid tax as well. Maui County appealed the decision, and the case now sits in the Intermediate Court of Appeals.

In the next few weeks, we will be taking a close look at some of the issues, including the validity of the assessments, the validity of the Time Share classification, and even whether the case belongs in the right court.

---30---

LINK: Ocean Resort Villas v. County of Maui — The Documents

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

Affordable Hawaii Coalition

ALEC

Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Senate Informer

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

Hunting, Farming and Fishing Assoc.

I Vote Hawaii

If Hawaii News

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

OHA Lies

Ohana Policy Group

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Copenull

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

TEA Party Maui

TFB Micronesia

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT