In a move hailed as a national first, Hawaii’s Governor Josh Green signed legislation on Tuesday implementing a new tax on hotel rooms and vacation rentals. The additional levy aims to generate funds specifically dedicated to addressing the growing challenges posed by climate change, including shoreline erosion and the increased risk of wildfires.

The signing comes nearly two years after the devastating wildfire in Maui that claimed 102 lives and decimated the town of Lahaina, underscoring the urgent need for proactive measures to mitigate climate-related disasters.

Officials project that the 0.75% increase to the existing transient accommodations tax (TAT) will generate approximately $100 million annually. These funds will be strategically allocated to crucial projects across the state. This includes replenishing the iconic beaches of Waikiki, bolstering infrastructure through measures like hurricane clips for roof reinforcement, and actively managing flammable invasive grasses that contributed to the rapid spread of the Lahaina fire.

Speaking at the bill signing ceremony, Governor Green emphasized the necessity of these actions for the state’s future. He highlighted the creation of a new state fire marshal position, expected to be filled within the next two months, as a direct response to the lessons learned from the Maui tragedy. Furthermore, Governor Green suggested that other states and nations facing similar climate-related threats will need to adopt comparable strategies.

The new tax, effective January 1st, will add a modest 0.75% to the daily room rate. Governor Green illustrated this by noting that a $400 hotel room would see an additional cost of approximately $3 per night.

Hawaii already has a significant tax on short-term accommodations. The current state TAT of 10.25% will rise to 11% with this new legislation. Combined with other state and county taxes, visitors to the islands will face a total levy of nearly 19% on their accommodations, positioning Hawaii with one of the highest such tax rates in the United States.

This landmark legislation signifies Hawaii’s commitment to proactively addressing the impacts of climate change and investing in the long-term resilience of the islands and its communities. The funds generated will be vital in safeguarding Hawaii’s natural beauty and ensuring the safety and well-being of its residents.