(HONOLULU) — Hawaii has passed legislation to increase people staying at hotels to help the islands cope with the increasing pressures from climate change.
The bill, SB1396, adds a 0.75% levy to existing taxes on tourist lodging within the state — including hotels rooms, timeshares and vacation rentals starting Jan. 1, 2026. It also imposes an 11% tax on cruise ship bills for each night the ship is in a Hawaiian port.
The new legislation is expected to raise nearly $100 million a year, and will be used for environmental protection and defenses against natural disasters amplified by climate change, including rising sea levels, coastal erosion and shifts in rainfall patterns. The state sees up to 10 million visitors per year, according to the Hawaii Tourism Authority.
Among the projects needed on the island are coral reef protections and clearing invasive grasses that can fuel wildfires.
The new tax will be added to the existing 10.25% tax Hawaii imposes on short-term rentals, raising the total to 11%. In addition, counties in Hawaii charge a separate 3% lodging tax. Travelers also pay a 4.712% general excise tax that applies to virtually all goods and services.
Come Jan. 1, the state’s total tax on short-term rentals will climb to 18.712%.
The bill passed by a large margin in the state’s House and Senate. Gov. Josh Green also supports the bill and intends to sign it, according to a statement released on Friday.
It represents “a generational commitment” to protect the ‘āina — a Hawaiian word that mean “land” but also signifies the deep connection between people and the environment — Green said. It is also the nation’s first statewide tax on lodging meant specifically to address the impacts of climate change, Green said.
“Hawai’i is truly setting a new standard to address the climate crisis, and I want to thank lawmakers for their unrelenting work these past two years in bringing this to fruition,” Green said.
Green told The Associated Press that he predicts visitors will be willing to pay taxes that help to protect the environment.
Care for ‘Āina Now, a local environmental advocacy group, estimates a $560 million gap for environmental stewardship on the Hawaiian islands.
A higher tax increase was initially proposed but was pared down after legislators heard concerns from the travel industry, AP reported.
The governor has until July 9 to sign the bill into law.
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