HONOLULU (AP) β Hawaii lawmakers passed on Friday that will increase the stateβs lodging tax to raise money for environmental protection and strengthening defenses against -fueled natural disasters.
Gov. Josh Green supports the bill, indicating he will sign it. The bill adds a 0.75% levy to the stateβs existing tax on hotel rooms, timeshares, vacation rentals and other short-term accommodations. It also imposes a new 11% tax on cruise ship bills, prorated for the number of days the vessels are in Hawaii ports.
Officials estimate the tax will generate nearly $100 million annually. They say the money will be used for projects like replenishing sand on , promoting the use of to secure roofs during powerful storms and clearing like those that fed the deadly wildfire that destroyed downtown Lahaina in 2023.
The House and Senate, both controlled by large majorities of Democrats, both passed the measure Friday.
this is the nation's first state lodging tax that raises money for the environment and coping with climate change.
Hawaii already levies a 10.25% tax on short-term rentals. As of Jan. 1, the tax will rise to 11%. Hawaii's counties separately charge a 3% lodging tax, and travelers also have to pay the 4.712% general excise tax that applies to all virtually all goods and services. The cumulative tax bill at checkout will climb to 18.712%, among the highest in the nation.
Green said people have told him the increase is small enough people wonβt notice. He observed many people come to Hawaii to enjoy the environment and predicted they will welcome committing dollars to protect shorelines and communities.
βThe more you cultivate good environmental policy, and the more you invest in perfecting our lived space, the more likely it is weβre going to have actually lifelong, committed travelers to Hawaii,β he said in an interview.
Only funds raised by the 0.75% addition and the new tax on cruise ship stays will go exclusively toward natural resources and climate change. Revenue from existing state lodging taxes would continue to flow into state's general fund and to help pay for the construction of Honolulu's rail line.
John Pele, the executive director of the Maui Hotel and Lodging Association, said there's broad agreement that the money raised will go to a good cause. But he wonders if Hawaii will become too expensive for visitors.
βWill we be taxing on tourists out of wanting to come here?β he said. βThat remains to be seen.β
The first draft of the legislation called for a larger increase, but lawmakers pared it back.
βWe heard the concerns about how do we make sure that we are able to sustain our industry as well as find new resources to address the needs for environmental sustainability,β said Democratic Rep. Linda Ichiyama, vice speaker of the House. βSo it was a balance.β
Zane Edleman, a visitor from Chicago, said he could envision the extra cost prompting some travelers to head elsewhere else like Florida. But he said it would depend on how the state shares information about what it does with the money.
βIf you really focus on the point βthis is to save the climate and actually have proof that this is where the funds are going, and that thereβs an actual result thatβs happening from that, I think people could buy into it,β Edleman said.
Audrey Mcavoy, The Associated Press
