Hawaii Accommodation Tax | Highest in US

Honolulu Latest to Hike New Accommodation Tax: Highest in US

Last it was Maui that enacted an additional 3% accommodations tax effective November 1. Maui’s County Council had introduced the bill that was then signed into law by Mayor Victorino. Kauai also approved and implemented a 3% tax hike on accommodations. But now it is Honolulu’s turn.

Honolulu just added 3% to other accommodation taxes. 

The bill to add the new 3% tax on all visitor accommodations was approved by the County Council last week. That will be added to the state’s current accommodation tax of 10.25% and the Honolulu GST tax of 4.5%.

A similar bill implementing an additional 3% accommodations tax is going through the Hawaii Island County Council and is expected to pass.

HB862 tax bill created additional taxes.

Hawaii’s legislature kicked off these increases via HB 862. That measure went into effect starting October 1. As a result, the state now has the highest combined accommodation tax in the US. Kauai was the first county to adopt this increase.

In July, the legislature approved the accommodation taxes and funding for the troubled Hawaii Tourism Authority (HTA). These taxes are a significant source of revenue for all the islands and are applied to both your Hawaii vacation rental and Hawaii hotel stays.

Governor Ige initially vetoed the bill designed to halt funding for Hawaii Tourism Authority via accommodation taxes. The legislature feels strongly, given they then overrode the governor and want to fund HTA via its general fund to provide better checks and balances.

We aren’t convinced about HTA’s abilities no matter how it is funded, given a checkered past and not enough to show for the money it has received. See much more on that below.

Each island will tax visitors independently.

For years, the counties have received an allotment of the statewide uniform 10.25% accommodations tax rate, but that will now come to an end. Instead, each county will add its surcharge to that existing statewide tax.

Statewide, Hawaii has the highest combined tax rate in the US. 

Our current state accommodations tax is 10.25%. However, with that entire amount going to the state, nothing will be shared with the counties. That is expected to cost the islands over $100 million annually in lost revenue.

The counties are implementing their own charge of 3%, which brings the total accommodation tax to 13.25%, up 29% over the previous rate. That plus 4.17% GST on Maui and 4.712% GST elsewhere in Hawaii. The combined tax on hotels and vacation rentals is to be approximately 18%.

Thus, Hawaii is set to have the highest overall tax on accommodations in the US., according to the National Conference of State Legislatures.

Does the latest tax increase in Honolulu impact you?

Updated 12/6/21.

230 thoughts on “Honolulu Latest to Hike New Accommodation Tax: Highest in US”

  1. I am a frequent visitor to Hawaii. I have visited Hawaii Maui Kona and Oahu. I consider these taxes to be impact fees. Meaning they are used to pay for the infrastructure necessary to service a community made up of less than 200,000 which serves over 2 to four million visitors a year. That is a tremendous strain on infrastructure including roads sewer water electricity and other essential infrastructure needed to support both the tourism industry and the local economy as well as the local people. I have visited foreign countries wherein they have entry fees ranging from $15 to $100. On a multiple country trip I have paid in excess of $500 in these entry fees in addition to the local county state and federal taxes of the country.

  2. We were in Hawaii January 7-15, 2022. Received letter stating new tax would be added to our already completely paid for reservations. Is that legal?

    1. Hi Mindy, my understanding FOR Maui is if you made your reservation before Nov 1, 2021….regardless of when you are visiting/staying then you do not have to pay the tax. Again that is for Maui only, each island/county made their own effective date. Hope that helps.

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