Hawaii Adding Climate Change Tax To Hotel Stays As Of January 2026

Hotel stays in Hawaii will be getting a little more expensive starting in 2026, thanks to the introduction of a first-of-its-kind tax.

Hawaii hotel taxes increasing to 11% as of January 2026

Lawmakers in Hawaii have passed a bill to raise the tax on hotel stays and other vacation rentals, specifically to fund efforts to fight climate change. Senate Bill 1396 was passed on April 25, 2025, and is expected to be signed into law by Governor Josh Green.

As of January 2026, the tax on hotels and other accommodations will increase by 1.75%, from 9.25% to 11%. The expectation is that this will generate between $85 million and $100 million per year in additional revenue. Hawaii hasn’t otherwise increased taxes on hotel stays since 2010.

In the past, there was talk of introducing a $50 per person fee for visitors to enter the state. However, that never passed, as lawmakers were concerned it would violate the Constitution’s right to free travel. So this agreement is considered to be a compromise.

Here’s how Representative Adrian Tam described this new bill:

“Our residents and communities deserve to be protected. As we continue to invite visitors to Hawaii to share the beauty of this land, this bill is a huge step in ensuring adequate funding is set aside to steward and protect our delicate ecosystems for visitors, our constituents and communities for generations to come.”

How will the additional hotel tax revenue be used?

Funding from this tax will be used to address the impacts of climate change on the state, and mitigate further impacts, by authorizing the funding of resiliency projects, and establishing the climate mitigation and resiliency special fund. Funding will also be used to establish the economic development and revitalization special fund.

Here’s how the bill describes the intent behind this increased tax:

The legislature finds that Hawaii is experiencing a climate emergency. The effects of climate change, such as rising temperatures, prolonged droughts, and increasingly destructive and deadly weather events, are felt across the island chain. These impacts threaten not only our vibrant ecosystems but, as actors within these ecosystems, the people of Hawaii as well. To ensure the health, safety, and wellbeing of Hawaii’s lands, waters, and people, successful mitigation of and adaptation to climate change is imperative.

The legislature further finds that given the scale and impact of the climate emergency, the State must invest in bold actions to prepare for, mitigate, and adapt to climate change, including resiliency to intensifying natural disasters. A coordinated approach is necessary, and the department of defense, charged with protecting the safety and welfare of the people of Hawaii and the State’s lead for hazard mitigation and disaster readiness, is prepared to assume this responsibility, in coordination with the departments of business, economic development, and tourism; land and natural resources; and transportation, as well as the community, to provide for the safety, security, and wellbeing of Hawaii’s places and people.

This is the first time that we’re seeing a US state introduce a hotel tax specifically to address climate change.

Bottom line

As of January 2026, hotel taxes in Hawaii will be increasing, from 9.25% to 11%. That 1.75% tax increase is being used specifically to address the impacts of climate change, by setting up new funds. The expectation is that this will lead to an incremental $85-100 million per year in revenue for the government.

Ultimately tourism is a balance, and needs to serve not just visitors, but also locals. Assuming the money is used to make life better for Hawaiians, then I’d say it’s fair enough.

What do you make of Hawaii’s new hotel climate tax?