Hawaii Approves Landmark Climate Tax on Tourism

Hawaii lawmakers have passed landmark legislation to increase the state's lodging tax from 10.25% to 11% and impose an 11% tax on cruise ship bills, prorated by days in port, starting January 2026. Additional county and excise taxes will bring the total tax on short-term accommodations to 18.712%, making it one of the highest in the nation. The new taxes are expected to generate nearly $100 million annually to fund climate change adaptation and environmental protection, including restoring beaches, reinforcing homes against hurricanes, and removing invasive grasses linked to wildfires like the 2023 Lahaina fire. Governor Josh Green is expected to sign the measure into law. Supporters believe the tax will not significantly affect tourism and will promote sustainable travel, while some in the tourism industry express concerns about visitor numbers. Hawaii is the first U.S. state to dedicate a tourism tax specifically to climate resilience.