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Maui Seeks to Quickly Implement New Tax on Tourists Under New Law

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KAHULUI, Hawai‘i — Officials on Maui are moving quickly to implement a new tax on tourists after state lawmakers overrode a veto by Gov. David Ige this week.

State lawmakers overrode Ige’s veto of a bill that overhauls how the state funds the Hawai‘i Tourism Authority and allocates tourism tax revenue to the counties.

The new law allows the state's four main counties to collect a 3% tax from visitors staying at hotels and other short-term rentals.

Before the new law, the state collected a 10% hotel tax and distributed a share to each county. Now, the counties can levy their own surcharge to the tax and keep the money for county needs.

The bill would also stop funding the tourism agency with money raised by the transient accommodations tax. Lawmakers intend to pay for the agency with money from the general fund, though for the current fiscal year they appropriated federal coronavirus relief funds.

“This will help tremendously,” said Maui County Council Chair Alice Lee. Lee said that will bring Maui nearly triple the revenue, Hawaii News Now reported Thursday.

“Instead of $23 million, we’ll probably receive in the neighborhood of $50 to $70 million,” Lee said.

Maui has seen a sharp increase in tourism since pandemic restrictions have eased.

State Rep. Sylvia Luke, the House Finance Chair, said under the old system, O‘ahu got the bulk of the money because it is the most populous island in the state. Now counties will receive money based on how many visitors they get.

Luke said Maui could benefit the most.

“The island is just overrun with tourists,” Luke said. “And you look at the population of Maui, compared to O‘ahu, there’s a lot more tourists per capita.”

California visitors Phil and Diana Asenas think the law is unfair.

“Taking a little bit of an advantage of people who truly want to get out and have been locked down for two years now,” said Phil Asenas.

“They’re definitely taking advantage of us,” Diana Asenas said. "But at the same time, if we want a vacation, we have to suck it up too. But it’s not right. It’s definitely not right.”

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