Hawaii lawmakers have passed landmark legislation introducing the United States’ first dedicated environmental tourism tax, aimed at raising substantial funds to address the escalating impacts of climate change. The measure, which received strong support from the Democrat-controlled state legislature, is expected to be signed into law by Governor Josh Green.
The bill introduces a 0.75% increase to Hawaii’s existing transient accommodation tax, applicable to hotel rooms, timeshares, holiday rentals, and other short-term stays. It also levies a new 11% charge on cruise ship bills, proportionate to the time vessels spend docked in Hawaiian ports. The so-called “green fee” is projected to generate nearly $100 million annually.
“This legislation, which I intend to sign, is the first of its kind in the nation and represents a generational commitment to protect our ‘āina [land],” Governor Green said. “Hawai‘i is truly setting a new standard to address the climate crisis.”
Funds raised will support environmental protection and disaster preparedness projects, such as replenishing eroded beaches in Waikiki, installing hurricane clips on roofs to improve storm resilience, and removing flammable invasive grasses like those that fuelled the devastating Lahaina wildfire in 2023.
The measure will take effect from 1 January 2026. With the increase, Hawaii’s tax on short-term accommodation will rise from 10.25% to 11%, and when combined with the existing county-level lodging tax (3%) and general excise tax (4.712%), the total checkout rate will reach 18.712%—among the highest in the United States.
Despite potential concerns over affordability, Governor Green argued the increase is minor relative to the overall cost of travel to Hawaii and would be seen positively by environmentally conscious tourists. “The more you cultivate good environmental policy… the more likely it is we’re going to have lifelong, committed travellers to Hawaii,” he told the media.
Some in the tourism sector remain cautious. John Pele, executive director of the Maui Hotel and Lodging Association, acknowledged the fee’s purpose but warned, “Will we be taxing tourists out of wanting to come here? That remains to be seen.”
Lawmakers had initially proposed a larger increase but scaled it back after considering industry concerns. “It was a balance,” said Linda Ichiyama, vice-speaker of the House. “We wanted to ensure we could sustain our tourism industry while finding new resources for environmental sustainability.”
The final bill passed with broad support and is expected to serve as a model for other climate-vulnerable regions reliant on tourism. Governor Green has until 9 July to officially sign it into law.
