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The picturesque island state of Hawaii, a favored vacation spot for millions yearly, is poised to implement a tourist levy to address the impacts of a warming globe. The state, part of the United States, is considering a tax on visitors booking hotels, vacation rentals, and other temporary accommodations.
Hawaii Plans Climate-Focused Tourist Tax
The innovative measure aims to raise approximately £75 million ($100 million) annually in new funds, according to officials. A legislative proposal slated for votes in the House and Senate proposes an additional 0.75% tax on daily room rates beginning January 1, 2026.
Allocation of the New Revenue
The generated revenue would be earmarked for various environmental and infrastructure projects, including:
- Restoration of eroding beaches through sand replenishment
- Assistance to homeowners in installing hurricane-resistant roof clamps
- Removal of invasive plant species, such as those that exacerbated the catastrophic wildfire in Lahaina
Devastating Wildfire in Lahaina
The Hawaiian town of Lahaina experienced the most lethal wildfire in the U.S. in over a century in August 2023. The blaze resulted in 102 fatalities, displaced thousands of residents, and reduced the town to ruins.
Governor’s Perspective
Governor Josh Green emphasized the necessity of the tax, stating, “We encountered a $13 billion (£9.7 billion) disaster in Maui, with 102 lives lost. These funds will aid in preventing future tragedies.” He noted that Hawaii is trailblazing this approach, with no other state dedicating lodging tax revenues explicitly for environmental protection or climate change mitigation.
Estimated Tax Rates
The state’s current 10.25% tax on daily accommodations would increase to 11% under the new proposal. Additionally, Hawaii’s counties impose a 3% surcharge, and both state and counties levy a combined 4.712% general excise tax on goods and services, including hotel accommodations.
Overall Tax Implications
This would result in a total tax burden of around 19%. Governor Green expressed confidence that tourists would willingly pay the additional tax, enabling the state to maintain pristine beaches and preserve popular destinations such as Maui’s road to Hana and Oahu’s North Shore.
Industry Reaction
Jerry Gibson, president of the Hawaii Hotel Alliance, which advocates for the state’s hotel operators, expressed contentment that lawmakers avoided a higher tax increase initially proposed. “No one in the tourism sector advocates for higher taxation,” he stated. “However, our state requires funds for essential initiatives.”