Maui Pushing for 3 percent Additional Sales Tax on Visitors as Tourism Increases

Hawaii lawmakers are moving to implement a new law that will allow counties to collect a 3 percent tax from visitors staying at hotels and other short-term rentals as eased pandemic restrictions bring in more tourists.

"This will help tremendously," Maui County Council Chair Alice Lee told Hawaii News Now Thursday.

Before this new law, the state collected a 10 percent hotel tax and split it among each county. Now, Lee said Maui will bring in triple the revenue, as each county can levy their own surcharge to the tax and use the money for local needs.

"Instead of $23 million, we'll probably receive in the neighborhood of $50 to $70 million," Lee said.

This comes after the state legislature overrode Gov. David Ige's veto of a bill that changes how the state funds the Hawaii Tourism Authority.

With this bill, the agency will no longer be funded by the state hotel tax and will now receive money from the general fund. This fiscal year, however, funds will be appropriated from the federal coronavirus relief fund.

For more reporting from the Associated Press, see below:

Hawaii Tourism
Counties in Hawaii are looking to implement a 3 percent tax on visitors staying in hotels and short-term rental as tourism increases after eased pandemic restriction. Tourists crowd the Hilton Hawaiian Village Lagoon in Waikiki on Aug. 24, 2018 in Honolulu, Hawaii. Kat Wade/Getty Images

State Rep. Sylvia Luke, the House Finance Chair, said under the old system, Oahu got the bulk of the money because it is the most populous island in the state. Now counties will receive money based on how many visitors they get.

Luke said Maui could benefit the most.

"The island is just overrun with tourists," Luke said. "And you look at the population of Maui, compared to Oahu, there's a lot more tourists per capita."

California visitors Phil and Diana Asenas think the law is unfair.

"Taking a little bit of an advantage of people who truly want to get out and have been locked down for two years now," Phil Asenas said.

"They're definitely taking advantage of us," Diana Asenas said. "But at the same time, if we want a vacation, we have to suck it up too. But it's not right. It's definitely not right."