Hawaii’s governor signed a new law Tuesday that increases the tax on hotel and vacation rental stays to raise money for dealing with shoreline erosion, wildfires, and other effects of climate change.
This move comes nearly two years after a wildfire in Maui killed 102 people and destroyed most of Lahaina. It’s the first tax in the country created to help respond to climate change.
Officials say the tax will bring in about $100 million each year. The money will go toward projects like adding sand to Waikiki’s eroding beaches, using hurricane clips to secure roofs in strong storms, and clearing flammable plants like the ones that fueled the Lahaina fire.
At the signing ceremony, Gov. Josh Green said Hawaii needs more firebreaks and plans to hire a fire marshal, a role created after the Lahaina tragedy, within the next two months.
Green added that other states and countries will need to take similar action to deal with the growing impact of climate-related disasters.
“There will be no way to deal with these crises without some forward-thinking mechanism,” Green said.
The law adds 0.75% to the daily hotel room tax starting January 1. For example, this would mean about $3 more on a $400 hotel room.
Josh Green speaks in an eventIt also creates an 11% tax on cruise ship charges starting in July 2026. This will be adjusted based on how long ships stay at Hawaii ports, bringing cruise ship taxes closer to hotel room taxes.
Visitors to Hawaii already pay a high tax on rooms. With the new change, the current 10.25% tax on short-term stays will rise to 11%. Including other state and county taxes, the total tax on accommodations will be almost 19%, among the highest in the U.S.
Hawaii’s hotel industry supported the bill, saying it would help make the visitor experience better. Green said the industry considered the “greater good” for tourism, Hawaii, and the planet.
Originally, Green suggested putting the new tax money in a separate fund, but lawmakers decided to place it in the general fund. The final version of the bill asks the governor to request money from the Legislature for projects such as protecting native forests, plants, and animals; strengthening climate readiness; and reducing tourism’s impact on the environment. Green said they will work together to carry out the law.
State Rep. Adrian Tam, who leads the House tourism committee, said the state must show people that the money will be used properly and openly. He said Hawaii’s tourism industry depends on its clean and beautiful environment.
“The visitor industry will struggle if we do not take action now,” said Tam, a Democrat from 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.”