Hawaii Passes First-Ever Green Fee. Here's How It Will Affect Tourists

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Hawaii is renowned for its natural beauty and stunning geographic features. It is also a state that relies heavily on tourism for its economic prosperity. Now, Hawaii is looking to their tourism base to help foot the bill for preserving and enhancing their green spaces and public use facilities, as they have passed the first 'green fee' in the United States. This tax, which will be paid by visitors to the islands in the form of an increased Transient Accommodation Tax (TAT), is set to start on January 1, 2026.

The stated purpose of this tax, which was passed as ACT 96, is to provide funding for various (although yet to be specified) environmental enhancement and preservation projects. So, given the money raised will be used to protect and restore beaches, reefs, and other natural areas utilized by everyone, why are tourists tasked with footing the bill? Well, since Hawaii has less than 1.5 million residents but attracts around 10 million visitors annually, the usership of these areas tilts decidedly towards tourists.

Additionally, the Hawaiian government has taken pains in the past to present locals from having to pay extra fees and taxes on top of the high cost of living there, such as giving residents free admission to state parks while visitors pay. This bill does much the same. Furthermore, while they are the first state in the U.S. to implement such a fee, they are not the first in the world to tax tourists for environmental projects. A growing number of countries, particularly those prone to high tourism, have begun charging such fees in recent years.

For most tourists, the impact will be minimal. The 0.75% increase on the TAT they already pay equates to an extra $0.75 per $100 spent on overnight accommodations. A common example that has been circulated since the tax was passed notes that a $400 hotel room would cost an additional $3. Given that Hawaii already ranks near the top on TAT or hotel/motel tax rates in the U.S., some have expressed concern over adding to the existing TAT. The biggest impact, however, will be felt by cruise ship passengers, who until now have not been required to pay any TAT.

This is not Hawaii's first attempt to protect the environment. In the past, efforts have been made to limit environmental impacts of tourism, such as requiring the use of reef safe sunblock like Coral Isles Reef Friendly Sunscreen. However, this new green fee will not just mitigate damage to the environment by limiting harmful actions, it will raise money to protect, enhance, and revitalize natural areas, especially after natural disasters. While specific projects have yet to be identified, it has been established that all of the money raised through this fee will be used to benefit the environment.

That said, the funds, which are expected to exceed $100 million each year, will be allocated for projects such as beach, reef, and wildlife habitat restoration, including areas along some of Hawaii's popular hiking trails. Essentially, with tourism and wildlife getaways are on the rise, the state found it necessary to protect the unique creatures of Hawaii. This ensures that future generations of locals and visitors alike will be able to experience Hawaii's natural beauty.