How does Hawaii run on 0.3% property tax? (small business, calculate, transaction)
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Yeah taxing tourists up the yingyang is pretty standard everywhere. I just booked a hotel room at the New jersey shore for a nominal rate of $355/night but the effective rate after taxes is $403.37. So between the state, county, and municipality there's a 13.625% tax on the hotel room alone.
Imagine how many hotel rooms the state of Hawaii is taxing, and at what rate, 52 weeks a year.
For January 2021, visitor arrivals dropped 80.1 percent compared to a year ago
Quote:
Originally Posted by jtab4994
Yeah taxing tourists up the yingyang is pretty standard everywhere. ...
Imagine how many hotel rooms the state of Hawaii is taxing, and at what rate, 52 weeks a year.
Was taxing. As of this past May, hotel room tax revenue dropped 92%.
Gotta be hurting now, with only the locals available for revenue extraction. The state is considering a 16% income tax rate for individuals earning more than $200,000 a year (up from 11% currently)
Doesn't seem like the Hawaiian govt is taking a bigger chunk from somewhere else....
And how did this practice (of low property tax) got started?
It's teeny tiny. Need to build a road? Maybe it'd take a few days vs. months for a large state. Hawaii might not even need the road, since people can ride a bike there. It's population is low, even for a city, much less a state. With the high property values it has, I can see that the money might be enough. It obviously is.
Also, in states where there is a low property tax, there may be higher than avg sales and other taxes. The counties and cities also have sales taxes.
It also has a state income income tax. From 7% to 9%, I read.
Texas has high property taxes, but it has a decent sales tax rate, and no state income tax.
Was taxing. As of this past May, hotel room tax revenue dropped 92%.
Gotta be hurting now, with only the locals available for revenue extraction. The state is considering a 16% income tax rate for individuals earning more than $200,000 a year (up from 11% currently)
Every state is doing the same thing. Here in PA we have an across the board 3.07% personal income tax ($1.00 to $Infinity pays the same rate) and they are proposing to increase that rate to over 4.50%.
And as everyone knows, the rates will never go down once the voters and taxpayers get used to paying the higher rate.
Given a choice between raising income tax and raising property tax, I'll take an increase in income tax. I've heard of far to many elderly widows (and to a lesser extent, widowers and couples) forced out of their homes because of steep, sudden property tax increases.
Tourism. Taxes on hotel rooms, meals, rental cars and similar.
As discussed earlier in the thread, there is also a high state income tax. Other things seem to be quite expensive, too, such as vehicle registration fees for residents (if you're a non-resident military member, you get a steep discount on registration fees).
But I do love the low property taxes in Hawaii, which amount to about $1,500 a year on my ~$500,000 condo in Honolulu.
Every state’s economic activity is different, as is every state’s tax code and attitude towards revenue extraction
Quote:
Originally Posted by jtab4994
Every state is doing the same thing. Here in PA we have an across the board 3.07% personal income tax ($1.00 to $Infinity pays the same rate) and they are proposing to increase that rate to over 4.50%.
And as everyone knows, the rates will never go down once the voters and taxpayers get used to paying the higher rate.
Given a choice between raising income tax and raising property tax, I'll take an increase in income tax. I've heard of far to many elderly widows (and to a lesser extent, widowers and couples) forced out of their homes because of steep, sudden property tax increases.
Not every state is doing the same thing -- states vary widely in total (state+local) tax burden, with Hawaii, Connecticut and New York filling out the top slots in every US ranking. States with no income tax fill out the "least burdened" ranks. Exact rankings vary depending on whether they use median household income, the state's share of net national product, or some other measure of "burden"
Hawaii, until recently, was able to shift much of their tax burden onto out-of-state and international tourists.
I can't afford to live in EITHER Hawaii or California. But they have a high cost of living because both states are highly desirable to live in. Just gorgeous.
Hawaii has the nation's second highest total state+local tax burden, outranked only by New York
Quote:
Originally Posted by davebarnes
Ignoring property taxes makes this chart useless.
If you'd tried the link in my post before criticizing it, the site has the full chart -- and bottom line is Hawaii has the nation's second highest total state+local tax burden, outranked only by New York.
It isn't just wallethub -- other sites weight things differently, but in every ranking I have seen, Hawaii is in the top 10% of states by tax burden, and most sites publish their methodology in case you want to check their math.
I can't afford to live in EITHER Hawaii or California. But they have a high cost of living because both states are highly desirable to live in. Just gorgeous.
I was inspired by your comment to build a table accounting for the real out-of-pocket cost of a state, including cost of living which turns out to a major factor in some cases.
In my table I account for 4 cost categories:
-- Income tax (on assumed $100K income)
-- Property tax (on assumed $1 mil home value)
-- Sales tax (on assumed $40K living expenses)
-- Cost of living adjustment (on same $40K living expenses)
For the percentages I grabbed what looks reasonable from the web. COL adj. is different from sales tax, which is ON TOP OF prices of goods; so there should be no double-counting by considering both.
I then compared 3 profiles and ranked the states + DC:
-- Regular resident, who pays all 4
-- Retired resident, who pays all but income tax (assuming low income so income tax is negligible)
-- Out of state homeowner, who pay only property tax
Based on this analysis, Hawaii is very expensive for both types of residents, regular or retired. But it seems very tax-friendly to out-of-state homeowners...
Not 100% accurate, but hopefully this gives a rough picture. Is my conclusion reasonable about Hawaii? What other factor should come into this comparison?
I'm focused on Hawaii because I an contemplating buying a home there.
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For January 2021, visitor arrivals dropped 80.1 percent compared to a year ago
