Groundbreaking 'Green Fee' Law in US State Imposes Unique Tax on Hotels and Short-Term Rentals for All Travelers

SUNSEEKERS heading to Hawaii must now shell out more money to cover a tourist tax hike.

Government officials have praised it as a new “green fee,” but opponents have slammed it as a “surf tax” which bumps up accommodation prices.

Hawaii starting charging visitors for environmental stewardship from January 1, 2026Credit: Getty The so-called ‘green fee’ has been slammed by some as a ‘surf tax’ and ‘money grab’Credit: Getty

Hawaii Gov. Josh Green signed legislation last May to generate an estimated nearly $100 million annually.

The green fee adds about $3 per night to your bill if you’re booking a $400-per-night hotel room, reported Aloha Hawaiian Vacations .

“Some are praising it as a much-needed environmental investment,” it added.

“Others feel like it’s just another added cost at a time when tourism still hasn’t fully bounced back post-pandemic.”

Forbes described it last month as a “first-of-its-kind visitor levy in the United States aimed at funding climate resilience and environmental conservation in the state.”

The levy raises rates on hotel room, vacation rentals and short-term rental stays.

The government also wanted to slug cruise line passengers – but the new charge is being challenged by industry officials in a lawsuit.

The cruise ship industry has been fighting the fee – with a lawsuit currently before the courtsCredit: Getty

Money raised through the tax is to be invested in climate disaster resilience and environmental protection, according to the government.

“Visitors are willing to pay a climate impact fee in order to support Hawaiʻi’s environmental protection efforts and preserve the beauty and cultural heritage of the islands for future generations,” it explained last May.

SURF TAX

But, some tourists have resisted what they’re calling a “surf tax” said the Robb Report .

There’s also been some negative comments on social media, where it’s been slammed as a “money making” venture, and a “disgusting cash grab” which will “make Hawaii even more unaffordable.”

“We have no emissions testing on cars in Hawaii, but now we’re suddenly concerned about pollution and are going to place a climate tax on tourists?” asked one resident.

“This is about greed and incompetence, not the environment.”

Hawaii does not require a mandatory tailpipe emissions test – also known as a “smog check,” for vehicle registration, said Engineer Fix .

“Unlike many states that quantify pollutants like hydrocarbons and nitrogen oxides, Hawaii does not perform this type of performance-based assessment.”

Visitors have been charged the new levy since January 1, after it was signed into law last May.

The tax was prompted by recent natural disasters, including the 2023 Maui wildfires that killed more than 100 people and destroyed thousands of structures.

It raises the state’s transient accommodations tax (TAT) by 0.75% for a total of 11% placed upon the nightly lodging rate, said the governor last May.

An aerial view shows smoke from the wildfires on the island of Maui, HawaiiCredit: Reuters

Prior to its approval, officials had signaled hopes to slug tourists $40 to raise “$200 million in conservation workforce revenue.”

However Senate Bill 1396 instead increased the TAT rate by a more modest 0.75% – rather than a higher fee.

Supporters are thrilled that money raised will be spent on projects such as replenishing beach sand, coral reef rehabilitation, plus fire prevention projects.

“As an island chain, Hawaii cannot wait for the next disaster to hit before taking action,” said Gov. Green last June.

“We must build resiliency now, and the green fee will provide the necessary financing to ensure resources are available for our future.”

The measure is Act 96, and was signed by Governor Josh Green on May 27, 2025Credit: Alamy

The cruise ship industry has managed to avoid the fee – for now.

An 11th-hour reprieve was granted by the federal appellate court, reported Civil Beat on January 1.

“Judges upheld the cruise industry’s request that its ships not have to pay the new fee while in port — or to pay any of the visitor taxes already charged to hotels and vacation rental owners — while the battle over their inclusion plays out in court.

“That means Hawaii will see a 10% decrease in expected revenue from the nation’s first green fee while the injunction is in effect.

“That reduction would become permanent if the industry’s main trade group, Cruise Lines International Association, prevails in court.”