Hawaii's governor signs new hotel tax legislation to help cope with
climate change
[May 28, 2025] By
AUDREY McAVOY
HONOLULU (AP) — Hawaii's governor signed legislation Tuesday that boosts
a tax imposed on hotel room and vacation rental stays in order to raise
money to address eroding shorelines, wildfires and other consequences of
climate change.
The signing, which comes nearly two years after a Maui wildfire killed
102 people and wiped out almost all of Lahaina town, marks the nation's
first such levy to help cope with a warming planet.
Officials estimate the tax will generate nearly $100 million annually.
The money will be used for projects like replenishing sand on eroding
Waikiki beaches, promoting the use of hurricane clips to secure roofs
during powerful storms and clearing flammable invasive grasses like
those that fueled Lahaina’s wildfire.
Gov. Josh Green, speaking at a bill signing ceremony, said Hawaii needs
to build more firebreaks and pay a fire marshal, a new position created
after Lahaina that Green expects to be staffed within the next two
months.
Green said other states and nations will need to act similarly to
address climate disasters roiling the planet.
“There will be no way to deal with these crises without some
forward-thinking mechanism,” Green said.
The measure adds an additional 0.75% to the daily room rate tax starting
Jan. 1. Green said this amounts to an extra $3 tax on a $400 hotel room
rate.
It also levies a new 11% tax on cruise ship bills starting July 2026,
prorated for the number of days the vessels are in Hawaii ports, to
bring cruise ship taxes in line with room taxes on land.
Travelers to Hawaii already pay a significant room tax. With the new
law, the state’s existing 10.25% tax on short-term accommodations will
climb to 11%. Together with other state and county taxes, visitors will
pay a nearly 19% levy on their accommodations — one of the highest rates
in the country.
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Hawaii Gov. Josh Green, surrounded by lawmakers and supporters,
signs legislation in Honolulu on Tuesday, May 27, 2026 that raises
the state's tax on hotel rooms and other short-term accommodations
to raise money to help the islands cope with climate change. (AP
Photo/Audrey McAvoy)
 Hawaii's hotels ultimately supported
the bill, saying it would help improve the visitor experience. Green
said the industry looked at “the greater good” for tourism, Hawaii
and the planet.
Green initially proposed a bill that would put revenue from the tax
increase into a dedicated fund, but lawmakers instead put the money
into the state's general fund. Their compromise measure calls on the
governor to request funds from the Legislature for projects in the
following areas: protecting native forests, plants and animals;
enhancing climate resilience; and mitigating the effects of tourism
on the environment. Green said they will collaborate to implement
the law.
State Rep. Adrian Tam, the chairperson of the House tourism
committee, said the state must earn the public's trust that it will
spend the money transparently and in the best way possible. He noted
Hawaii's tourism economy relies on a brand that's in part dependent
on a pristine natural environment.
“The visitor industry will struggle if we do not take action now,"
said Tam, a Democrat representing Waikiki. "There will be nothing
left for them to showcase to the rest of the world if our beaches
are decimated, wildfires have taken over our towns and hikes left
unmanaged.”
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