Hawaii passes ‘green fee’ hotel tax hike to fund climate relief

WASHINGTON: Hawaii lawmakers have passed a “first of its kind” bill that increases the US state’s hotel tax to fund climate change relief efforts, the governor’s office said.

Hawaii Governor Josh Green said he intends to approve the legislation which raises the tax on short-term accommodations like hotels and rentals by 0.75 per cent. “This legislation, which I intend to sign, is the first of its kind in the nation,” Green said in a statement issued by his office on Friday. “Hawai’i is truly setting a new standard to address the climate crisis.”

The state, which hosts roughly 10 million yearly visitors, currently imposes a 10.25 per cent Transient Accommodation Tax (TAT) on vacation stays and other rentals.

Hawaii’s counties also impose an additional three percent tax, which with the new hike, will bring the overall hotel tax to 14 per cent statewide.

The tax hike will raise an estimated $100 million annually for disaster mitigation in the state, according to the governor’s office. It described the levy as a “climate impact fee” or “green fee”, adding that it “will help the islands to mitigate the impacts of climate change”.

A devastating wildfire swept through the Hawaiian island of Maui in 2023, killing more than 100 people and causing billions of dollars in damage.

“Given the devastation we saw on Maui in August of 2023, this measure is crucial because it will help us to deal with wildfire risk resulting from the climate change crisis,” Green said in the statement.