A measure that would increase the state’s vacation tax by 1% and apply an additional flat surcharge on accommodations per night is making its way through the Legislature.
The bill would also add a nightly surcharge on accommodations and allocate a portion of the Transient Accommodations Tax to manage the state's natural resources.
Rep. Linda Ichiyama was one of the introducers of the bill and explained that more resources are needed to protect Hawaiʻi’s environment.
“I think ultimately, we know that we need to invest more in protecting Hawaiʻi's natural environment and that's the reason why people come here, is to enjoy our beaches, our hiking trails, our parks,” she said.
“We want to make sure that they have a good experience and preserve those resources for future generations.”
The last time the state increased the visitor tax by 1% was in 2018.
The current state TAT is 10.25% and counties have also been able to add their own 3% visitor tax.
That’s one of the reasons why the Hawaiʻi Lodging and Tourism Association opposes the measure.
The organization’s vice president Jared Higashi said he would prefer to have popular state-owned tourist attractions instead of a tax increase. He listed the operations at Hanauma Bay and Diamond Head as successes.
“That's kind of the model that we're looking at, right? Charging people going into site-specific areas, especially those with heavy traffic and using the funds that are collected at those sites to maintain and operate that specific site,” he said.
“So we know that the money that's being charged there is going back to that specific site.”
Gov. Josh Green has also proposed a $25 climate impact fee that would be imposed on visitors when they check into a hotel or short-term rental. He proposed a similar measure last legislative session that did not pass.
In January, House Finance Committee Chair Kyle Yamashita said he supported the concept of collecting fees from visitors to fund environmental management.
“I think in concept, we kind of are in agreement that there should be something that people pay into that are impacting us, and it should come from people from outside the state,” Yamashita said.
Ichiyama said that she prefers an increase on the TAT because the tax is already established instead of creating a whole new fee, as Green proposed.
The measure passed out of both the House Water and Land Committee and the Tourism Committee. It will likely be heard next by the Finance Committee.
