You plan a trip to Hawaii and notice a small new charge on your hotel or vacation rental bill. Hawaii’s Green Fee increases the transient accommodations tax so visitors contribute directly to climate resilience and environmental projects, beginning January 1, 2026.
They’ll want to know how much the levy adds, which stays and rentals it covers, and why the state calls it a first-of-its-kind climate impact fee. Expect a clear walkthrough of the fee’s mechanics, who it affects, and the legal and public debate shaping what comes next.
How Hawaii’s Green Fee Works: All the Essential Details
The Green Fee raises the statewide transient accommodations tax and lets counties add surcharges. It targets paid short-term stays and creates a new revenue stream dedicated to climate resilience and environmental projects.
Tax Rates and Who’s Affected
The law increases the transient accommodations tax (TAT) from 10.25% to 11% statewide by adding 0.75 percentage points. Counties may add a local surcharge of up to 3%, so a guest’s lodging tax can approach the high teens when combined with the general excise tax (GET).
This applies to hotel rooms, vacation rentals, timeshares and other stays rented for less than 180 consecutive days. He or she booking a short-term rental or a hotel room will see the change reflected on the lodging bill as part of the TAT line item. The state originally planned to include cruise passengers, but that portion faces legal challenges and is currently on hold.
New Rules for Hotels, Rentals, and Cruises
Hotels and short-term rental operators must collect and remit the higher TAT at checkout. Operators remain responsible for calculating the combined taxes — TAT plus any county surcharge and the GET — and updating their checkout systems accordingly.
Cruise-ship charges were in the initial bill language, but cruise lines sued and a federal appeals court placed parts of the law involving cruise accommodations on hold. Providers should track legal developments because the cruise provision could be reinstated or permanently excluded depending on court outcomes. Senate Bill 1396 contains the statutory language that operators and legal teams are monitoring for compliance specifics.
Reasons Behind the Law
State leaders framed the fee as a way to make visitors share in the cost of climate impacts and resilience after disasters like the 2023 Maui wildfires. Governor Josh Green and the Climate Advisory Team advocated for a dedicated funding source to bolster infrastructure, restoration, and disaster preparedness.
Lawmakers argued the fee promotes equity by tying revenue generation to tourism, the sector most linked to resource strain. The policy also aims to create predictable annual funding rather than relying solely on emergency appropriations after each event.
How the Revenue Will Be Spent
The law directs revenue toward climate disaster resilience, environmental protection, shoreline restoration, and infrastructure hardening. Officials project roughly $100 million per year in additional funds statewide, though actual collections will vary with occupancy and county surcharges.
Funds flow into state-managed programs and may be allocated to county projects through established budgeting processes. He or she responsible for project selection will include state agencies and advisory groups; the governor’s office and the Climate Advisory Team have signaled priorities around shoreline remediation, watershed protection, and emergency-response upgrades. For more on the law’s passage and intended uses, see the governor’s announcement.
Impact, Controversy, and What’s Next for Travelers
The new fee raises lodging costs and retools who pays for climate resilience in Hawaii. Travelers will see higher bills, counties may add surcharges, and legal and industry fights could change how the law applies to certain visitor categories.
Local and Tourist Reactions
Residents and visitors reacted unevenly. Many kamaʻāina welcome a dedicated revenue stream for rebuilding and shoreline protection after the 2023 Maui fires, while some local businesses and budget travelers worry the extra charge will deter repeat visits.
Tourists face an immediate cost increase: the statewide transient accommodations tax rose to 11% and counties can tack on up to 3% more, which combined with the general excise tax pushes total lodging charges higher. Vacation-rental hosts and hotel operators report more guest questions about final invoices and booking transparency.
The administration’s Climate Advisory Team framed the fee as necessary to fund resilience projects, so some community groups support it when funds target visible repairs. Others ask for clearer reporting and caps on county surcharges to ensure fairness.
Legal Challenges and Industry Pushback
The law already hit legal snags. Cruise-ship inclusion in the fee is currently on hold after industry litigation, showing how targeted parties can slow implementation. Hotels and rental platforms have pushed for precise guidance on collection and remittance to avoid double taxation or inconsistent guest charges.
Industry trade groups argue the fee could hurt competitiveness with other destinations unless applied uniformly. They also press for exemptions or phased implementation for long-term stays and certain rental types. Regulators must clarify whether short-term platforms or specific segments like surf schools and lessons tied to rentals fall under the new rules.
Courts and administrative rulings in coming months will determine enforcement scope. Travelers should watch for rule changes affecting refunds, booking disclosures, and which accommodations are exempted or delayed.
Environmental and Economic Effects
The fee is projected to generate roughly $100 million annually to fund climate mitigation and resilience projects, including shoreline restoration and infrastructure hardening recommended by the Climate Advisory Team. That funding focus aims to reduce future disaster costs and protect tourism assets.
Economically, some businesses may pass the fee straight to guests, increasing the effective cost of a trip and potentially shifting demand seasonally. Others worry about marginal impacts on local employment if visitation softens.
If counties set high surcharges, travelers could face nearly 14% on top of room rates before other taxes. Clear accounting and public reporting on expenditures will determine whether the fee produces measurable environmental benefits or fuels continued debate over tourism’s role in Hawaii’s economy.
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