Christine Hitt
Hawaii visitors will soon see their stays costing a bit more, as the Transient Accommodations Tax (TAT) is increasing next year.
The Hawaii Legislature has passed SB1396, a measure meant to mitigate the effects of climate change by increasing the state's portion of the TAT from 10.25% to 11%, effective January 2026. Counties are also given the authority to increase their TAT up to 3%.
"Travelers are increasingly seeking destinations that prioritize sustainability, and by investing in conservation efforts, renewable energy and sustainable tourism practices, Hawaii can maintain its competitive edge in the global tourism market while ensuring the long-term viability of its natural resources," the bill said.
The bill has been sent to Hawaii Gov. Josh Green, and he has until July 9 to sign it.
"This legislation, which I intend to sign, is the first of its kind in the nation and represents a generational commitment to protect our aina [land]. Hawaii is truly setting a new standard to address the climate crisis, and I want to thank lawmakers for their unrelenting work these past two years in bringing this to fruition," the governor said in a news release.
For the first time, cruise ship passengers will also have to pay the TAT, effective January 2026. This comes after a law that went into effect this year added TAT on alternative places to stay outside of a hotel, such as a camper van.
Those testifying in opposition to the bill stated that since climate change affects everyone in the state, it should be balanced across all taxpayers, and not solely on the tourism industry. They also worry that the increased taxes will negatively affect tourism.
"Hawaii already has a reputation for having the highest visitor taxes of any destination in the world," the president of the Maui Chamber of Commerce wrote in her testimony opposing the bill. "In addition to taxes on visitor accommodations, visitors are also subject to the general excise tax, rental car fees and taxes on our roads, parking fees at state parks and other taxes and fees assessed on activity-based businesses, all of which are passed down to the consumer," she continued. "This proposed tax increase could further hinder our economic recovery, which remains below prepandemic levels and was severely affected by the August 2023 wildfires."
Green, on the other hand, says that the measure enables the state to deal with wildfire risk due to climate change. "It is foundational to our ability to provide a safe and secure Hawaii for our children, our residents, our visitors and the environment," he said in a statement.