Hawaiʻi Signs 'Green Fee' Into Law Becoming First State Address Climate Change with Tourism Tax
Last updated: 4:35 PM ET, Wed May 28, 2025
At a time when climate change efforts are being put on the back burner or completely undone by the new U.S. presidential administration, Hawaiʻi is taking an important and bold step forward.
It has just become the first state in the country to adopt a “green fee,” which is a charge that will be added onto the cost of hotel room stays and short term visits to not only help protect the local environment, but to also deal with the increasingly challenging impact of global climate change.
Hawaiʻi Governor Josh Green signed the new measure into law yesterday. This development comes after several years of attempting to pass the measure.
“Hawaiʻi’s doing what other states and other nations are going to have to do … there will be no way to deal with these crises without some forward-thinking mechanism,” Green said as he prepared to sign the bill.
Green added: “I hope that the world is watching because having something that is a balance between industry and environment is going to be the way to go forward to protect your people, to protect your states, to protect your economy.”
Even though the measure is now law, the green fee will not take effect until January 1, 2026. The new fee is expected to raise about $100 million each year for Hawaiʻi, according to Honolulu Civil Beat.
In addition to protecting the environment and addressing climate change, some of the money from the new fee will be used to cover the costs of future disasters. Generating revenue for disasters at the state level is especially important at a time when the Trump Administration has slashed staff the Federal Emergency Management Agency (FEMA), along with its budget to respond to disasters around the country.
Under President Trump, FEMA has begun regularly denying federal assistance to states faced with disaster recovery. That includes for tornadoes in Arkansas, flooding in West Virginia and a windstorm in Washington state.
As part of Hawaiʻi’s new green fee, there will be a .75 percent increase on the tax that visitors are required to pay in association with stays at hotels or short-term accommodations. That increase puts Hawaiʻi’s transient accommodations tax (TAT) at 11 percent starting next year. Currently, the TAT fee is 3 percent.
How much does will the tax amount to for visitors? The state’s governor offered an example. For a $400 room stay, a visitor would pay about $3 extra.
That revenue will cover the cost of making Hawaiʻi’s vulnerable environment more resilient when hit by the heavier weather events resulting from climate change, including the more significant storms and harsher droughts. Additionally, the monies will be used to offset the cost of such events for locals, who typically pay the entire price for such damage.
As the measure is currently written, the new green fee also applies to the nightly rate travelers pay on cruise ship cabins. This is a new development. The state’s existing 3 percent TAT does not apply to cruise travelers.
The cruise industry has not warmed to the idea that it too will be swept up in the change. Cruise industry representatives have indicated that they will mount a legal battle.
In particular, the industry lobbying group Cruise Lines International Association (CLIA) sent a letter to lawmakers in Hawaii April hinting of legal action should the bill be passed. The organization has said if it were to pursue legal action, it would argue that the measure is unconstitutional, violating the Tonnage Clause, which prohibits states from taxing ship tonnage without congressional approval.
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