HONOLULU – The city of Honolulu’s residential tax for homeowners who live in million-dollar properties part-time will remain in effect after a state judge reversed his decision that it was unconstitutional.

Judge Gary Chang heard new arguments Friday from Honolulu Corporation Counsel Donna Leong. He ruled the city’s Residential A tax classification didn’t discriminate against non-residents, The Honolulu Star-Advertiser reported (http://bit.ly/2hSoAmX).

The judge’s decision comes after 20 Residential A property owners sued the city earlier this year. They argued that the ordinance requiring them to pay more taxes than standard residential class owners was unconstitutional. Chang had agreed with them in an October ruling.

Residential A owners, who live in homes valued at $1 million or more only part-time, pay $6 per $1,000 of assessed value, while standard properties are taxed at $3.50 per $1,000.

Chang said his new ruling was based on a more in-depth review of the matter.

“Simply, the court, upon further study, came to a different conclusion,” he said.

Leong said after Friday’s hearing that she was “very happy” with Chang’s decision.

“It’s a very significant decision for the entire city,” she said. “The tax revenues generated by this are about $39 million a year, so it is a very important piece of tax legislation. I can’t tell you how important it is for the city’s finances.”

Roy Kamikawa, an attorney for the property owners and a former state tax director, said that his clients would consider appealing the ruling.

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Information from: Honolulu Star-Advertiser, http://www.staradvertiser.com