PAGO PAGO, American Samoa (AP) - Despite opposition from local hotel owners, lawmakers in American Samoa passed a measure Thursday to implement a hotel room tax of 5 percent.
The final vote on the measure came by the territorial Senate, while the House gave its endorsement two weeks ago. The bill originated from Gov. Lolo Matalasi Moliga, who is expected to sign the measure into law in the coming days.
The revenues collected from the tax, which is expected to go into effect in June, will be used primarily to pay for improvements at Pago Pago International Airport, said Uelinitone Tonumaipea, the territory’s treasurer.
A government study found the tax could collect $200,000 annually from two major hotels alone - the 104-room Tradewinds Hotel and the 44-room Sadie’s by the Sea, Tonumaipea said. Three-quarters of the revenue from the room tax would go to the Department of Port Administration for the Airport Division, whose budget comes up $1.5 million in the red each year, he said.
Opponents say the tax is unfair because it targets only one segment of local businesses.
Sadie’s owner, Tom Drabble, suggested that the government create a sales tax that is applied across the board.
“Why pick on one segment of the community for a small amount of money - $200,000 - to be collected annually?” he said. “Our local people unfortunately will think twice if they should take a little break away from home.”
Some lawmakers were concerned that the tax would affect the development of the local tourism industry. But American Samoa Commerce Department Director Keniseli Lafaele said visitors to the territory are mostly business travelers - including federal government and military officials- and these types of travelers will continue to increase, even with the new tax.
Roy J.D. Hall Jr., interim chair of the American Samoa Visitors Bureau, said over the weekend that because this legislation was an administration bill to generate funding for airport improvements, it will not change the tourism industry.
“I do not believe this tax will have a major impact on tourism here. It is my hope that in the future a more comprehensive tourism tax can be introduced where 100 percent of the funds would go to tourism development,” he said. “Further, the tax should have the strong support of the business community.”
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