Hawaii lawmakers have passed a groundbreaking law aimed at funding environmental protection and enhancing disaster resilience amid climate change, marking the first such legislation in the U.S. Governor Josh Green is expected to sign the bill, which introduces a 0.75% increase to the existing accommodation tax on hotels, timeshares, and vacation rentals, alongside a new 11% tax on cruise ship bills for their duration in Hawaii ports.
The estimated revenue of around $100 million per year will be allocated to various projects to combat issues like land erosion and the management of invasive grass species, which contributed to the destructive Lahaina wildfires in 2023.
The legislation passed with considerable support from the predominantly Democratic state legislature. While the current short-term rental tax stands at 10.25%, following the new increase, the cumulative tax rate will reach 18.712%, the highest in the nation.
Governor Green described the hike as minimal, emphasizing that it would not significantly deter tourists, as their environmental commitment could attract more visitors. However, some travelers express concerns that the added costs might lead them to opt for other destinations like Florida.
The proposal was initially more ambitious but was adjusted to address concerns about the tourism industry’s viability. The bill awaits the governor’s signature by July 9th.
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