Bills increasing costs for tourists moving through Hawaii Legislature

by Kim Jarrett, The Center Square, Feb 27, 2024

Hawaii lawmakers are considering two proposals that would increase the transient accommodation tax, known as TAT, for tourists.

House Bill 2406 would add a $25 one-time fee for tourists, with proceeds going to the Climate Health and Environmental Action Special Fund, where the money would be used to "minimize the impacts of, and respond to, climate crises," according to Gov. Josh Green, who has voiced his support for the measure. The additional charges are in addition to the current 10.25% TAT.

House Bill 2081 would add $50 per night and increase the TAT from 10.25% to 11.25%. The money would go to the Department of Land and Natural Resources.

The House Finance Committee recommended approval of both bills on Friday, but some had reservations about House Bill 2406. Lawmakers said during the hearing they would prefer House Bill 2081.

Opponents said the bills could harm Hawaii's tourism industry, the state's top moneymaker.

"Increasing tourism taxes decreases the number of visitors. Moreover, policymakers cannot assume that tourism taxes will not have an additional effect on visitor spending," said Ted Kefalas, Director of Strategic Campaigns for the Grassroot Institute of Hawaii. "It is only common sense to assume that tourists will compensate for higher tourism taxes by adjusting their budgets and spending less on dining, activities or shopping."

The full Legislature must approve the bills.