Back in Issue #3, we flagged the growing momentum behind SB1396, the bill proposing a hike to Hawaiʻi’s transient accommodations tax (TAT) to fund climate initiatives.
Well, it’s official: Starting January 1, 2026, visitors will be paying even more on top of what’s already considered the highest tourist tax burden in the world. The state TAT is rising from 10.25% to 11% for hotels, vacation rentals, and timeshares. Add the county surcharges (up to 3%) and general excise tax (4.712%), and that $300/night room can easily push past $350 all-in.
And for the first time ever, cruise ship passengers will contribute, paying 11% on the prorated portion of their fare tied to time spent in Hawaiʻi.
Lawmakers say the increase is earmarked for climate resilience, infrastructure protection, and sustainable tourism.
Of course, those of us who’ve been around a while remember when the original TAT was supposed to be permanently dedicated to tourism funding… until it wasn’t. We’ll be watching closely to see if it will be different this time (if you believe it will be, I still have that bridge in Brooklyn to sell you).
Another bill we discussed previously, HB504, which would add a $20 fee for loyalty bookings, did not pass and was not included in SB1396.
