Hawaii
Hawaii Proposes New Tourist Fees, Targets Vacation Rentals
Governor Josh
Green today delivered his second State of the State Address at the Hawaii State Capitol, in which he addressed key topics, such
as the efforts underway to recover from last
year’s Maui fires, concerns about short-term rentals, bolstering the
economy by opening to tourism and reducing dependence on fossil fuels.
The issue of reducing
the state’s reliance on fossil fuels came hand-in-hand with a proposal for
charging tourists a new $25 fee. Green also said that he would be forced to place
a moratorium
on all short-term rentals in West Maui if an adequate number of people do
not volunteer their properties to house families displaced by the Lahaina
fire.
Addressing the state’s affordable housing crisis, the governor said that he
believes constructing new homes won’t solve the problem along. He has therefore
proposed an initiative aimed at the short-term
rental market, a topic that’s become quite controversial in recent years,
as local residents are pushed out in favor of high-earning vacation rentals.
“Our state is such Aerial shot of Hawaii’s Waikiki Beach. (Photo via jhorrocks / iStock / Getty Images Plus) (Photo Credit: jhorrocks/iStock/Getty Images Plus)
a desirable destination, and such a profitable investment for many, that people
from around the world have purchased property to hold as investments or rent as
short-term rentals to visitors—making on average four times what they would if
the property was simply rented to a local family,” Green said.
Tourist Fees in
Hawaii
Two separate
proposals are on the table, which are aimed at raising funds to support climate
change and fire control efforts by passing the cost on to out-of-state tourists.
According to local news outlet Beat
of Hawaii, the first would raise the accommodations tax rate by an undetermined
percentage, while the other is a $25 fee that would be tacked onto the cost of guest accommodations.
The Aloha State
already has the highest taxes on hotels and vacation rentals in the entire U.S.,
charged in three separate parts and totaling approximately 18 percent. In 2023,
the legislature put forth House Bill 820, which proposes a combined tax rate of 33
percent to be charged on short-term rentals, but that bill has been deferred
for the time being.
Then there’s Senate Bill 304, which puts forth a proposed piece of legislation
that would charge visitors a “Green Fee”, and on which Governor Green based part of his
campaign. If passed, it would assess a $50 impact fee that’s intended to offset the environmental
impacts of tourism (or, more specifically, its chronic
overtourism).
The Green Fee PHOTO: Rainbow Falls in Hilo. (Photo via Getty Images Plus / iStock / sorincolac)
would be assessed to any “person in Hawaii who is not a resident of Hawaii”,
according to the bill. Funds generated by the proposed law would be put toward
mitigating the effects of climate change by tackling such issues as, “coastal
erosion, sea level rise, damage to reefs, ocean acidification, coral bleaching,
damage to land resources, and other impacts.” The bill’s authors wrote that “current
underinvestment in the state’s natural resources poses a significant liability
to the visitor industry”, SF
Gate reported.
If the bill passes
into law, the Department of Land and Natural Resources would oversee the
visitor impact fee program, which would go into effect on July 1, 2025. Once
paid, visitors would be issued a license, good for one year. Failure to obtain this
annual license would result in an as-yet-unspecified fine.
A
previous draft of the bill passed through the state’s Senate in 2023, but
failed to advance any further, as House representatives failed to settle on the
details before the year’s legislative session came to a close. The same thing
had reportedly happened in 2022, as environmental groups have been pushing to
institute such a tourist fee for several years now.
Honolulu Civil
Beat reported that Green forecasted the Green Fee would generate as much as
$600 million per year for the state, while also weeding
out unwanted tourists (i.e., the ones with less money to spend). He
reportedly said that charging such a fee would, “decrease the number of
tourists that would come in at the low end, so we’ll have fewer tourists
overall with this additional revenue.”
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