Overview

• Hawaii’s State Legislature has approved a bill raising hotel and vacation rental taxes from 9.25% to 10% and imposing an 11% tax on cruise ship cabins in port.
• The tax revenue, estimated at $100 million annually, will fund climate change mitigation projects such as beach restoration, storm-proofing infrastructure, and replanting native forests.
• Governor Josh Green has confirmed his intention to sign the bill, with the new rates set to take effect on January 1, 2026.
• The measure, dubbed the 'green fee,' was motivated by the 2023 Maui wildfires, which underscored the state’s vulnerability to climate disasters.
• Cruise ship operators plan to challenge the cabin tax in court, but the lodging tax increase is not subject to legal disputes.