The state’s house and senate, both controlled by large majorities of Democrats, passed the measure by wide margins.
Experts say the bill is the first of its kind in the US.
Hawaii already levies a 10.25% tax on short-term rentals. As of 1 January, the tax will rise to 11%. Hawaii’s counties separately charge a 3% lodging tax, and travelers also have to pay the 4.712% general excise tax that applies to all virtually all goods and services. The cumulative tax bill at checkout will climb to 18.712%, among the highest in the nation.
Green, the governor, argued the increase was small enough tourists would not feel much of a difference. As many visitors travel to the state to enjoy the environment, he predicted they would welcome committing dollars to protect shorelines and communities.
“The more you cultivate good environmental policy, and the more you invest in perfecting our lived space, the more likely it is we’re going to have actually lifelong, committed travelers to Hawaii,” he told the Associated Press.
Zane Edleman, a visitor from Chicago, said he could envision the extra cost prompting some travelers to head elsewhere else, like Florida. But, he said, it would depend on how the state shares information about what it does with the money.
“If you really focus on the point – this is to save the climate and actually have proof that this is where the funds are going, and that there’s an actual result that’s happening from that, I think people could buy into it,” Edleman said.
The first draft of the legislation called for a larger increase, but lawmakers pared it back.
“We heard the concerns about how do we make sure that we are able to sustain our industry as well as find new resources to address the needs for environmental sustainability,” said Linda Ichiyama, vice-speaker of the house. “So it was a balance.”
John Pele, the executive director of the Maui Hotel and Lodging Association, said there’s broad agreement that the money raised will go to a good cause. But he wonders if Hawaii will become too expensive for visitors.
“Will we be taxing on tourists out of wanting to come here?” he said. “That remains to be seen.”
Green has until 9 July to sign the bill.
