Hawaii lawmakers have approved a new measure to raise the state's lodging tax, marking what experts say is the nation's first state-level tax of its kind designed explicitly to fund environmental protection and climate change adaptation. The legislation, which Gov. Josh Green is expected to sign, adds a 0.75% surcharge to Hawaii's existing 10.25% tax on short-term accommodations—like hotel rooms, vacation rentals, and timeshares—raising that rate to 11% as of Jan. 1. Hawaii's counties already collect an additional 3% lodging tax, and the general excise tax stands at 4.712%. The stacked total means travelers will face an 18.712% tax on lodging, among the highest in the US.
The bill also introduces an 11% tax on cruise ship stays, prorated based on days in port. Officials estimate the new taxes will bring in nearly $100 million annually, which will be earmarked for projects like the restoration of Waikiki beaches, reinforcing homes against hurricanes, and removing invasive grasses tied to wildfire risk—like the ones implicated in the 2023 Lahaina fire. Only the revenue from the new 0.75% add-on and the cruise ship tax will be directed exclusively to these environmental initiatives; other lodging tax revenue will continue to support the state's general fund and projects like Honolulu's rail line.
KHON notes that the legislation "positions Hawaii as a global leader in sustainable tourism." Backers say the tax hike is modest and that most visitors likely won't notice. "This is the money that we've been waiting for to deal with climate change," Green said, per Hawaii News Now. Some, however, like the Maui Hotel & Lodging Association's John Pele, worry that Hawaii's vacation costs could deter tourists. Lawmakers revised the original proposal downward to balance economic health with sustainability efforts. Visitors interviewed noted a willingness to pay more if the environmental benefits are transparent and measurable. (This content was created with the help of AI. Read our AI policy.)
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