Starting next year, visitors to Hawaii will be subject to a “climate impact fee,” which aims to generate funds to mitigate future environmental challenges the state is expected to face.
Hawaii Gov. Josh Green signed Law 96 on Tuesday, effectively approving a tax, also known as “green fees.” This is the first in the country.
“I hope the world is seeing because something that balances industry and the environment will be a way to go to protect our people. […]”Green said, and most importantly, to protect the lifestyle and life we want our children to have for generations.”
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The law is currently increasing the state’s temporary accommodation tax (TAT) by .75% and to 11%. This fee applies to the costs of tourism-related activities, such as hotels and cruise ships that dock in Hawaii.
To break it down, $3 for every $400 spent is directed towards conserving natural resources.
The bill is projected to raise an estimated $100 million a year to address what the state says is the roughly $5 billion in key funds needed to protect Hawaii’s environment.
New Hawaii laws raise temporary accommodation taxes to raise funds for environmental protection. (Getty Images)
“If we don’t take action now, the visitor industry will be struggling,” said Rep. Adrian Tam, chairman of the Tourism Commission.
Unlike other state programs, the money generated is not included in a dedicated special fund. Instead, Congress reassess its priorities each year to decide where money should go based on its biggest environmental needs.
The priority areas are to protect land and aquatic resources, climate and danger resilience and sustainable tourism.
The Hawaiian grassroots Institute, a longtime opponent of the bill, argues that it could hurt more than it would be useful.
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“There’s nothing like Hawaiian holidays. That’s 100% true. But that doesn’t mean it doesn’t affect visitor spending and Hawaii’s appeal as a destination,” said Maria Hill, policy director at Hawaii’s Grassroots Institute.
They argue that the rates will affect tourists as well as local residents and small businesses.
“We travel the island for work, to see family and to meet friends. So it’s taxes on local people and you can’t get away from it,” Hill said.
Act 96 will be effective on January 1, 2026.
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