Hawaii passes 'green fee' hotel tax to combat climate change

(AFP) Lawmakers in Hawaii have approved a groundbreaking bill that raises the state's hotel taxes to fund efforts to fight climate change, according to the governor's office. The initiative is expected to generate about $100 million annually.

Hawaii Governor Josh Green said he intends to sign legislation that increases the tax on short-term accommodations, such as hotels and rentals, by 0.75 percentage points. "This legislation, which I intend to sign, is the first of its kind in the nation. Hawaii is truly setting a new standard for addressing the climate crisis," he said.

Tourism tax set to reach 14%

The state, which receives approximately 10 million visitors annually, currently imposes a 10.25% tax on temporary accommodations (TAT) for vacation stays and other rentals. Hawaii's counties also levy an additional 3% tax, which, with the new increase, will bring the total tourist tax on hotels to 14% statewide.

According to the governor's office, the tax increase is expected to generate approximately $100 million annually for disaster mitigation. Governor Green described the measure as a "climate impact fee" or "green fee," adding that it will "help the islands mitigate the impacts of climate change."

"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 added in the statement.