Hawaii first state to charge climate change tax on tourists

Democrat Hawaii Governor Josh Green signed a "green fee" into law on Tuesday, which places an additional tax on tourists to fund climate change mitigation measures, the first such tax in the nation's history. The tourist tax applies to visitors staying at Hawaii hotels and short-term rentals, as well as cruise ships that port in the state.

Under Act 96, also known as Senate Bill 1396, the state's current transient accommodations tax (TAT) will increase by 0.75 percent, amounting to a total of 11 percent for nightly lodging. The increase will take effect on January 1, 2026, according to a press release from Gov. Green's Office. For example, a $400 night stay will cost an additional $3, as reported by Hawaii News Now.

The "Green Fee" is intended to address "the critical need to build resiliency against the impacts of climate change by providing a stable source of funding for environmental stewardship, hazard mitigation, and sustainable tourism," according to Gov. Green's Office.

“Hawaii cannot wait for the next disaster to hit before taking action. We must build resiliency now, and the Green Fee will provide the necessary financing to ensure resources are available for our future,” Green added.

The taxes are expected to generate $100 million annually, according to the governor’s office. While cruise ships bypassed the current TAT, the industry is no longer exempt as the new law seeks to promote "equity across the tourism industry" by ensuring all travelers equally contribute to protecting the island from potential impacts of climate change

The bill was enacted in part as a response to the state's deadliest wildfire in over a century that decimated Maui's Lahaina community in 2023, killing more than 100 people and burning the small town to ashes.

Proponents of the measure believe it is a small price to pay, while critics, particularly in the tourism industry, have expressed concerns about prices getting too high.

"I am extremely worried about getting too expensive for the people that come here to Hawaii," Jerry Gibson, president of the Hawaii Hotel Alliance, told Hawaii News Now. "You always have to balance those decisions, and we're certainly getting up to a point where we need to really be careful and watch it."

The Department of Justice earlier this month launched a probe into the state's proposed climate policies on allegations that they "threaten energy independence."