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Hawaii’s New Tourist Tax—‘Green Fee’—Signed Into Law

by Daniel McCarthy  May 29, 2025
Hawaii Governor signing the new increase in the hotel room tax into law surrounded by cheering constituents

Photo: Hawaii Office of the Governor

Starting in 2026, travelers heading to Hawaii will be taxed at a higher rate for their hotel and vacation rental stays.

On Tuesday, Hawaii Governor Josh Green signed the new “Green Fee” tax into law, officially known as Act 096. The legislation increases the transient accommodations tax (TAT)—already charged on hotel rooms and vacation rentals—by 0.75%, with the goal of funding environmental projects across the state.

It’s the first “Green Fee” in the U.S. and stems directly from recommendations made by the state’s Climate Advisory Team following the Maui wildfires two years ago.

“Hawaii is experiencing a climate emergency,” the bill states. “The effects of climate change, such as rising temperatures, prolonged droughts, and increasingly destructive and deadly weather events, are felt across the island chain.”

The additional three-quarters of a percentage point will amount to roughly $3 more on a $400 nightly hotel room. With the volume of visitors to Hawaii, the increase is projected to generate an additional $100 million annually for the state to support “climate change mitigation and disaster resilience.”

The state says it will select projects as revenue becomes available. Those projects will include “environmental stewardship, climate and hazard resiliency, and sustainable tourism.”

While the 0.75% increase may seem minor—just $3 more on a $400 room—it brings the total TAT to 11%. That equates to $44 in nightly taxes on that same $400 stay. And that’s not the only tax visitors pay—the Associated Press estimates the total tax burden, including state and county taxes, to be closer to 19%.

New Tax on Hawaii Cruise Ships

The legislation also calls for applying the 11% TAT to cruise ships docked in Hawaii starting Jan. 1, 2026. That state called that segment “a sector of transient accommodations that has long gone untaxed under the TAT” and said that adding the TAT to cruise stays “promotes equity across the tourism industry.”

While the hotel industry supports the bill, the cruise industry does not.

Last week, a spokesperson for Norwegian Cruise Line told TMR that the tax would increase cruise fares by an estimated $350 per person, reaching about $1400 for a family of four on top of the $200 per person in port fees and taxes already charged to passengers on Hawaii-homeported ships like Pride of America.

“The added financial burden not only affects our guests but also presents challenges for us as cruise operators—impacting local businesses and communities that depend on a thriving cruise industry,” the spokesperson said.

The industry is likely to challenge the tax.

  
  
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