Hawaii lawmakers are set to increase taxes on travelers using hotels and short-term rentals to address environmental issues exacerbated by climate change. The proposed 0.75% increase to the indoor tax, effective January 1, aims to generate about $100 million annually for projects like beach erosion mitigation. With broad support among Democratic leaders, the bill is anticipated to pass easily.
Governor Josh Green emphasized that the funds would help prevent disasters following the 2021 Maui wildfires, which claimed 102 lives. He noted that Hawaii is a pioneer in linking tax revenues to climate initiatives. The combined lodging tax rate, including state and county taxes, would rise to nearly 19%, making it one of the highest in the U.S.
While the hotel industry expressed concerns over increased taxes, Jerry Gibson of the Hawaii Hotel Alliance acknowledged the necessity of funding for environmental protection. The state faces a $561 million annual gap in conservation funding, and the new tax is seen as a compromise to address this shortfall. The revenues will support both immediate and long-term infrastructure needs. Advocates stress that the new tax reinforces the idea that visitors should contribute to preserving Hawaii’s unique environment.
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