(Honolulu, May 5) Visiting Hawaii will soon cost a bit more. On May 2, the Hawaii State Legislature passed a groundbreaking bill to increase the state’s accommodation tax. The additional revenue will fund environmental initiatives and enhance defenses against natural disasters caused by climate change. Starting January 1 next year, Hawaii’s short-term accommodation tax, including hotels, will rise from the current 10.25% to 11%. Governor Josh Green is expected to sign the bill into law soon.
According to reports by Japan’s Yomiuri Shimbun and CNN, the new law will impose an additional 0.75% tax on short-term accommodations in Hawaii. It also stipulates an 11% tax on cruise ship tickets for vessels docking in Hawaii, calculated proportionally based on the length of stay.
Known as the “Environmental Fee,” the additional tax revenue will address climate change issues, such as droughts that exacerbate wildfires. In 2023, wildfires on Maui resulted in 102 deaths, believed to have been worsened by drought conditions.
Hawaii receives nearly 10 million visitors annually. The state government estimates the new measure will generate an additional $100 million (approximately RM427 million) annually. On Instagram, Governor Green urged public support, stating, “This small tax increase will create a meaningful legacy.”
The additional funds will support various programs, including replenishing sand on eroding Waikiki Beach and promoting hurricane-resistant metal roof clips. Experts note that Hawaii is the first state in the U.S. to dedicate accommodation tax revenue specifically to environmental protection and climate change mitigation.
Currently, Hawaii imposes a 10.25% tax on short-term rentals. Starting January 1, 2026, the rate will increase to 11%. Combined with a 3% accommodation tax collected by each county and a 4.712% general excise tax on most goods and services, tourists will face a total tax rate of 18.712%—one of the highest in the U.S.