Hawaii is raising taxes and fees, much of which disproportionately impacts visitors. Since the state has stated a desire to reduce Hawaii tourism, perhaps these plans are in perfect alignment with achieving the state’s goals.
London-based World Travel and Tourism Council, however, cautioned that high taxes on tourism could reduce tax revenues collected as it either deters travel to a destination or reduces the number of days visitors spend. In addition, they warned that high taxes on visitor accommodations and airfare can negatively impact highly desirable local spending. The State of Hawaii does not seem to be concerned about that.
Here are two examples of how some of those increases will happen and two different philosophies regarding implementation. One is immediate, and the other is to happen more incrementally.
It starts with Governor Josh Green suggesting two additional ways to raise funds to address climate change and fire mitigation. One would increase the accommodations tax rate by some percentage, while the other would see a $25 fee added to accommodations. There’s also the proposal for a $50 Green fee to start next January 1. Any, all, or none of these may be implemented, but it doesn’t stop there.
Hawaii car rental taxes to be increased incrementally.
Hawaii has a base tax on Hawaii car rentals of $5 a day. It’s on its way up to $8 per day, and that’s being accomplished by adding $.50 each year on January 1. That started in 2022 and will conclude in 2030.
It’s not about the small amount of increase but rather an interesting means to an end. By adding incremental amounts, Hawaii might achieve its goal of reduced tourism more slowly than, say, a sudden $50 climate impact fee. That could also help preserve tourism-related tax income, which is very much needed.
Hawaii car rental taxes and fees now total 15% + $12/day.
In addition to high base Hawaii car rental rates, there are the following additional mandatory fees and taxes. General excise tax (varies by island) up to 4.71%. State motor vehicle $6/day. Vehicle registration at $1.45/day. The customer facility charge is $4.50/day. Hawaii airport concession fee of 11.1%. By comparison, in California, the total state tax is 10.75%.
Hawaii also has the highest accommodation taxes in the US at 18%.
The state’s accommodation taxes are comprised of three parts. First is the base tax rate of 10.25%. That entire amount is going to the state and, since 2021, has not been shared with the counties. The counties then implemented their tax of 3%, which brings the total tax guests pay to 13.25%. That brought the accommodation tax up a whopping 29% in 2021. Those taxes are in addition to Hawaii’s 4.712% GST. Thus, the combined tax on hotels and vacation rentals is approximately 18%.
Visitors have already commented on how they feel about these tax increases.
“Today, I received an email from Costco Travel informing me that the Hawaii rental car surcharge tax has gone up 50 cents per day… this is on top of the other rental car taxes, hotel taxes, occupancy fees, and entrance fees….now add the impact fee. After our next trip in April, it will be very difficult to return. Hawaii will become the home of the billionaire elites and locals will be their serfs.”
Beat of Hawaii Reader, Allan.
Proposal to hike Hawaii vacation rental tax hike to 33% deferred.
Last year, House Bill 820 called for a combined tax rate of 33% on Hawaii vacation rentals. Fortunately, at least for now, that bill has been deferred. As with hotels, the combined tax on vacation rentals is approximately 18%. When the bill was proposed, one of the bill’s authors said:
“Transient vacation rentals continue to be a problem for the State as public discourse and perception have grown more critical of the increasing number of visitors and the impacts of over-tourism. Your Committee believes that the State needs to take a strong stance on holding the tourism industry accountable for the impacts on the State’s resources and residents, such as the lack of housing for residents, as many units that may have housed residents are instead used as transient vacation rentals. This measure will ensure that transient vacation rentals that host visitors for less than thirty days pay their share to address the impacts of the tourism industry on the State.”
Representative Sean Quinlan
On the other hand, the non-profit Hawaii Tax Foundation said, “This Bill violates the United States Constitution as well as the Hawaii State Constitution. It disenfranchises a certain category of taxpayer.” Others concurred that this was a discriminatory pro-hotel, anti-vacation rental proposal.
Where do you stand on more Hawaii visitor tax increases?
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It is astounding the links Hawaii leaders will go to crush our economy. We have one business. Tourism. And they are doing everything to pretend that they can survive without tourism. Where will the jobs come from without tourism? They deserve what they get. Current Hawaii leaders do not want residents to be prosperous. They want to control us by introducing stupid legislation instead of solving real problems. People do not live here to be controlled. We live here to enjoy our life without corrupt leaders. But it is obvious that there are many corrupt leaders on the islands who want to put us out of business.
Sad because we come there every another year it mite be time to fine a new place.
Taxes are theft. No way around it .The way Hawaii robs its citizens and blatantly is defying the constitution by exstorting its visitors is a shame. This Governor Green sounds like a tyrant. Free market capitalism is the only way to find a fair way forward. Third parties calling them selves government officials with their hands in the cookie jar with the excuse the average person needs regulated and protected is the biggest crime ever. Them using the natural cycles of the planet and calling it Global boiling is just another tool to get the average person to live in fear and make easier to exstort more capital. All the while reducing freedom.
Free market capitalism has created the current situation
Actually, I wish that someone could define “free market capitalism”. It seems that since trickle-down economic theory, those with the capital have been free to take advantage of recessions, inflation and the boom years, sticking it to those with no other choice than to buy essentials at whatever rate the capitalists desire.
Come on people do you really think the government can run your life better than you? At every choice what we better in the long run. Buy a new car at high interest or pay now your mortgage? After 30 yrs you have equity not a rusty car. Would you prefer Cuba and China over USA? Instead of blaming the tourist sell them an icecream cone.
I loved Hawaii when my wife and I visited last year but other destinations may be calling. Why go if I’m not wanted.
Taxes are theft? I assume you will donate your social security checks as well as Medicare?
“The position that taxation is theft, and therefore immoral, is found in a number of political philosophies.” This is from the introduction to the Wikipedia article on “Taxation as Theft”.
Not all taxes are theft but there are many taxes, disguised as fines, that are theft.
Social Security and Medicare taxes are not theft but a very poor way of saving money for retirement and medical care.
First of all, SS and Medicare are federal taxes and not local, so there’s that fact. Pretty sure the point the person was trying to make is that adding taxes on top of taxes gets to be a large burden which often doesn’t achieve the goals intended. In fact, it may actually result in the complete opposite. The economics of HI travel is pretty simple. There is an amount people are willing to pay to participate in something. If it gets too expensive, the math doesn’t work out so they don’t visit. HI government officials are not, by definition, leaders. Adding too many fees to make travel to HI less attractive is bad for the residents.
I reported multiple illegal rentals in Waikiki about 8 months ago and the city has not done anything about them, they are still listed on Airbnb.
Just like during covid. Mom and pop small businesses have to take the brunt of the loss of income they would make renting to a vacationer rather than the big hotels who could better absorb the loss as they would only rent a small number of rooms to people waiting to rebuild. Typical.
Hawaii is not unique regarding out of state or institutional ownership of homes. They probably won’t go away because as Green states, they make a lot more on short term rentals than long term (probably a unique truth out of the mouth of a politician). There is no easy way out of this either long or short term. Short term is Green’s government attempts to take over private property. Good luck with the US constitution on that. That won’t prevail. But, like other vaca destinations, like San Diego where I live, I think the solution lies in how short term rentals are taxed. Taxing a second or non-primary home is the answer. Make it 1000% of the normal rate and I guarantee they’ll be on the market tomorrow. The public will win.
Hawaii is a beautiful place and I have been several times. I disagree with all your raises in fees and think that global warming is a hoax sold to you by your legislators that you put in power. Maybe you need to look in a different direction for government people. The way that the Maui fire was handled was horrible. They let the Hawaian down. Love the Hawaiian people but hate all the politics involved.
To those pushing the use of EVs and other technologies as a way to combat climate change in Hawaii, you do realize that all you’re doing is rearranging the deck chairs in the Titanic, right? China and India account for more emissions than the rest of the top 10 emitters put together. The entire state of Hawaii could go to a Stone Age existence and it wouldn’t make a bit of difference towards climate change on the islands.
I still feel a responsibility to do my part. If everyone throws up their hands, nothing will ever change, and no pressure will be put on all the big offenders.
I have read that EVs are not really environmentally responsible, though.
The lithium batteries are highly toxic to the environment. And they are easily ignited and difficult to put the fires out. We had 2 fires at nearby disposal sites. It takes 10x the amount of water to put them out and yet one still reignited. My personal opinion is they are a bit good for our environment in the bigger picture.
Mypersonal opinion is tat theyare a bit good in our environment in the bigger pictute”?
The mining and processing of the ores used in these batteries isa worse environmental nightmare than the making of photocell panels and that says a lot!
Sorry Don, I totally agree with you. The mining and the toxicity of disposing the batteries are horrible for the environment. Exposure to flooding also causes fire ignition….I did not mean a bit good, I meant Not good….I should have checked my text, spellcheck has a mind of its own.
So that means you are hunky dory with drilling, coal mining and fracking? Sometimes the best choices aren’t always the perfect choice, but in comparison…
Hey Pat, I totally understand that feeling. If it makes you feel better driving an EV, go for it. Just realize that, in the grand scheme of things, it’s doing nothing for the environment. And, if you follow geopolitical news, you’d know that there’s no pressure any country (or league of countries) can put on China/India when their choices are to continue to maintain their current emission rates or relegate their vast populations to a lifetime of poverty. Until that riddle gets solved, nothing’s ever going to change.
I am certainly not pushing anyone to go solar or electric. I just love mine and it saves me a lot of money. I will never go back to a gasoline powered vehicle, but you can keep on driving and filling your SUV or whatever …the next tax on those might be coming sooner than later.
What’s coming is a fee based on vehicle weight and/or miles driven. EV’s won’t protect anyone from paying the taxes normally collected as gas tax or excise taxes. California is there now. Perhaps it makes sense to do weight versus vehicle cost. Vehicle weight cost may hurt lower income folks. But if you’re buying an EV, even in an attempt to help global warming (which that in and of itself does not do due to coasts associated with powering up the mining operations of exotic metals and subsequent processing of those metals into usable products), the current math doesn’t work in the US, let alone the world where a quarter of the population (India and China) don’t care to. Happy charging!
If this tax is aimed at reducing visitors, it might deture some. If it is truly to help combat climate change, I think the Hawaiian governments would do well to have a surtax for cars that aren’t hybrid or totally electric.
I live in Maui and have an electric car and so do many of my friends. However, we don’t have enough public EV chargers on Maui and our homeowner’s association is only “talking about it” at every new board election because the people on the board have SUV’s and trucks!
So you purchased something without enough infrastructure to support it so the irony of that is just way beyond funny.
Not sure what you mean. I bought my condo in Maui 20 years ago and there were no electric cars on Maui, thus no EV stations. Not buying an electric car would obviously not encourage installation of EV stations. Most people who have electric cars also own homes and have no problem charging their cars. It’s those of us who live in condos trying to convince conservative board members to speed up the process. In the meantime, I am perfectly fine with charging my car at the beach, hotels, arts center, shopping malls, college etc. Most don’t charge anything, but they get my business instead of those who don’t offer it.
Where does the electricity come from? Mostly diesel generators. Just in the last couple years have I seen a few solar farms on the BI. There is alot more in Oregon and we don’t have the sunshine obviously.
Check out Pacific Biodiesel on Maui and Kauai. We are also lucky to have enough sunshine and wind to transition to clean energy. Let’s move forward, Hawaii!
Seriously!? First, there is literally Nothing environmentally clean about the mining and processing of the ores used to make lithium batteries Or photocell panels! The toxic wastes left behind is truly amazing! And as far as wind power, when those blades wear out, and they do, they take up huge volumes of landfill space which is hardly at a premium on Maui. And then of course the number of migratory birds killed every year by those same wind turbines is both disgusting and disturbing.
So yeah Eva, keep believing what you want to believe about both of those technologies but it doesn’t change their issues one bit.
Seriously? You’re going to compare the effects of alternative energy sources to the effects of traditional oil, gas, and shale oil extraction? Before you leave the planet, here are a few considerations: Countless have found that because output from wind and solar replaces fossil generation, renewables also reduce CO2 emissions. For example, an NREL study found that generating 35% of electricity using wind and solar in the western U.S. would reduce CO2 emissions by 25-45%; your “bird analogy” ignores the fact that wind energy requires no fuel-delivery infrastructure like gas pipelines, propane trucks, coal barges and railroads, all of which produce their own negative environmental impacts.
Far more but limited by BOH word count.
Depends upon which island. On Kaui over 50 % of the power is renewable, solar, biomass and hydroelectric.
We have owned a deeded time share for over 25 years and have visited the islands many times. The additive taxes are now to the point where we are unlikely to return and will sell our interest. Hawaii’s idiots are doing everything to turn the islands and residents into poverty, third world where a few rich people prey on the labor of residents.
We’re still coming to Maui in March but we had the opportunity to back out due to a flight cancelation, we didn’t because we wanted to bring some money to Maui due to the fires. But it’s now also turned into a farewell tour as we won’t be returning after 30 years of coming every couple of years. The taxes, the loss of Aloha, bleached reefs and no more Lahaina. What’s the point?
I almost never participate in social media. But over the last few days, reading the tsunami of comments has made quite an impression. I am a Maui resident for 15 years.
My point is the proposed visitor fee is not enacted. It’s a proposal by a politican. The state cannot tax you for simply arriving here, generally speaking. The US Constitution bestows the right to unfettered interstate travel, generally speaking. Fees for using, parking at state parks, state historical sites, etc by nonresidents is a grey area. (Hey I’m a retired lawyer, and I am not doing the research). I personally have liked almost every visitor I’ve met. Our economy needs you. It breaks my heart we are losing 4th gen Maui grandkids to the Mainland.
Oh, the $25 tax will happen. It will be attached to anyone with accommodations at a hotel or STR. It’s pretty much a done deal.
We have two grandchildren who were born and raised there. All these taxes is going to make it harder for our grandchildren to see their grandparents
My daughter (local born) comes to Hawaii to visit her parents…now it will cost them $50.00 and husband…totaling $100.00.
Hawaii will price itself out of the tourist business?
Green fees should be apply to everyone that lives in Hawaii , not just the tourist. Let’s be fair..