Tourist tax hike measure to fund climate relief headed to Governor

HONOLULU (HawaiiNewsNow) — Visitors staying at hotels and short-term rentals could see their transient accommodations tax jump to 11% as early as January 1st.

State lawmakers on Friday passed a bill adding a new 0.75% levy to the existing TAT, a move Governor Josh Green has said he supports.

“The visitor industry was opposed to it, but it finally made it through primarily because it’s been pitched as a disaster mitigation, climate change relief fund,” said Colin Moore, HNN political analyst.

Cruise ship passengers would also have to pay the tax — for the first time — prorated for the number of days their vessel is in a Hawaii port.

Officials estimate the so-called green fee will generate nearly $100 million annually to fund projects like replenishing sand on eroding beaches and clearing flammable invasive grasses like those that fed the Lahaina wildfires.

Experts say this would be the nation’s first state lodging tax that raises money for the environment.

“It wasn’t just another tax on tourists that was serving a particular purpose, and I think the legislature and the governor are concerned that with the rollback of federal funding, Hawaii will have to cover more about the share of climate change mitigation costs and wildfire costs itself,” Moore said.

Added to each county’s 3% lodging tax and a 4.7% general excise tax — a visitor’s tax bill could reach more than 18.7%, among the highest in the nation.

Another likely change: The once powerful Hawaii Tourism Authority —which has seen its funding cut over the years — is poised to lose its autonomy.

“I think the legislators have been very frustrated with its performance, so now they’re basically going to have much more power to, to control how it operates. I think that there’s a lot of concerns so that it’s going to lose its independence and be more beholden to the politicians and politics.” Moore said.

Governor Josh Green has until July 9th to sign or veto each bill, or they automatically become law.

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