In this paper, we evaluate the manner in which timeshare occupancy is taxed in the State of Hawaii. Our objective is to ascertain how best to design a timeshare occupancy tax that treats all types of visitor accommodations equitably and enhances tourism’s net economic benefit to Hawaii’s residents. In particular, we address two concerns. First, what is the incidence of the timeshare occupancy tax? Second, what is its appropriate tax base? Answers to these two questions inform optimal timeshare taxation policy in Hawaii and elsewhere in the U.S.
