Hawaii Enacts First National Tourism Tax for Climate Resilience

Hawaii has passed landmark legislation increasing its lodging tax by 0.75%—from 10.25% to 11%—and introducing an 11% tax on cruise ship stays, with both measures aimed at raising nearly $100 million annually for environmental protection and climate resilience. The funds will be used for projects such as restoring beaches, removing invasive grasses that contributed to the devastating 2023 Lahaina wildfire, and reinforcing buildings against hurricanes. The cumulative tax on short-term accommodations will rise to about 18.7%, making it one of the highest in the nation, but Governor Josh Green, who supports and plans to sign the bill, believes most tourists will support the small increase because it protects the natural environment they visit. This is the first state lodging tax in the U.S. specifically dedicated to combating climate change. Lawmakers noted the tax was carefully balanced to support environmental sustainability without overly burdening the tourism industry. The increase will take effect January 1, 2026, and is expected to set a national precedent for tourism-funded climate action.