No. SCAP-22-0000587 and SCAP-23-000139, Thursday, January 11, 2024, 2 p.m.

SCAP-22-0000587 In the Matter of the Tax Appeal of WEST MAUI RESORT PARTNERS, LP, Appellant-Appellant, vs. COUNTY OF MAUI, Appellee-Appellee

SCAP-23-000139 In the Matter of the Tax Appeal of OCEAN RESORT VILLAS VACATION OWNERS ASSOCIATION, Appellant-Appellant, vs. COUNTY OF MAUI, Appellee-Appellee.

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The above-captioned consolidated cases was set for oral argument on the merits at:

Supreme Court Courtroom
Ali‘iōlani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

The oral argument was livestreamed for public viewing via the Judiciary’s YouTube channel at YouTube.com/hawaiicourts and ‘Ōlelo TV 55.

Attorneys for Appellant-Appellant WEST MAUI RESORT PARTNERS, LP:

Robert G. Klein, Kurt W. Klein, David A. Robyak, and James M. Yuda of Klein Law Group LLLC

Attorneys for Appellant-Appellant OCEAN RESORT VILLAS VACATION OWNERS ASSOCIATION:

William C. McCorriston, Jordon J. Kimura, and Brett R. Tobin of McCorriston Miller Mukai MacKinnon LLP  

Attorneys for Appellee-Appellee COUNTY OF MAUI:

Victoria J. Takayesu, Corporation Counsel, and Brian A. Bilberry, Deputy Corporation Counsel

NOTE: Order assigning Circuit Judge Dean E. Ochiai and Circuit Judge Paul B.K. Wong due to vacancies, filed 06/02/23 in SCAP-22-0000587.

NOTE: Order granting Application for Transfer, filed 06/06/23 in SCAP-22-0000587.

NOTE: Order assigning Circuit Judge Dean E. Ochiai and Circuit Judge Rowena A. Somerville, filed 06/23/23 in SCAP-23-0000139.

NOTE: Order granting Application for Transfer, filed 06/27/23 in scap-23-0000139.

NOTE: Certificate of Recusal, by Circuit Judge Paul B.K. Wong, filed 06/29/23 in SCAP-22-0000587.

NOTE: Order assigning Circuit Judge Rowena A. Somerville, in place of Circuit Judge Paul B. K. Wong, recused, filed 06/30/23 in SCAP-22-0000587.

NOTE: Order granting motion to consolidate SCAP-22-0000587 and SCAP-23-0000139, filed 10/24/23.

COURT: Recktenwald, C.J., McKenna and Eddins, JJ., and Circuit Judge Ochiai and Circuit Judge Somerville, assigned by reason of vacancies.

Brief Description:

West Maui Resort Partners LP and Ocean Resort Villas Vacation Owners Association (collectively, “Appellants”) are the owners of timeshare units on Maui.  Appellants appealed their real property tax assessments to the County of Maui Board of Review (“BOR”).  The County of Maui (“County”) taxed Appellants’ properties under the Timeshare real property tax classification.  On appeal to the BOR, Appellants primarily alleged that the Timeshare classification was illegal because the County is only allowed to create classifications based on real property use under Maui County Code § 3.48.305 and the Timeshare classification was created to equalize transient accommodation tax disparities, which is impermissible under the Hawai‘i Constitution.  Therefore, they claimed that the classification violates the Hawai‘i and U.S. Constitutions and their units should have been taxed under the Hotel and Resort, rather than Timeshare, classification.  In both cases, the BOR found that it did not have the power to determine the assessments’ legality.  The BOR found the units were properly classified as Timeshare units and denied the appeals. 

Appellants then appealed to the Tax Appeal Court.  Appellants and the County filed cross-motions for summary judgment.  In both cases, the Tax Appeal Court granted the County’s motion for summary judgment.  Appellants appealed to the Intermediate Court of Appeals and applied for transfer of their cases to this court.  We granted transfer in both cases and requested additional briefing on a question of appellate jurisdiction in West Maui Resort Partners LP.  We concluded that this court has jurisdiction over West Maui Resort Partners LP and consolidated the two cases for oral argument.   

Appellants raise three arguments before this court: (1) the County violated Maui County Code § 3.48.305, entitled “Classification of land and building,” when it created the Timeshare Classification because it did not consider the units’ actual use; (2) the Timeshare classification violates the Hawai‘i Constitution because it collects a de facto transient accommodations tax when the Constitution only permits counties to tax real property; and (3) the Timeshare classification violates Appellants’ equal protection rights under the Hawai‘i and U.S. Constitutions.  The County argues that (1) the establishment of the Timeshare classification was not illegal or unlawful under the Maui County Code or the Hawai‘i Constitution; (2) a tax based on a real property parcel’s assessed value is an ad valorem tax; and (3) taxing the Timeshare classification at a higher rate than the Hotel/Resort classification is not an equal protection violation.