Pricey in paradise: There’s another new tax on stays in Hawaii

Dec 17, 2021

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Just when you thought it was safe to go back to the beaches (of Oahu) comes the pain of a new hotel tax in this part of Hawaii.

This week, the mayor of Honolulu signed a 3% transient accommodations tax (labeled TAT) into law that applies to all short-term rentals.

Related: Visiting Hawaii now: Safe Travels to stick around as restrictions ease

You will pay the tax not only at hotels, but also at Airbnbs, timeshares and any other vacation rental on the island of Oahu. (Honolulu is a city-county that includes Honolulu and the rest of Oahu.)

Keep in mind that the new tax is in addition to the 10.25% hotel tax already imposed by the state.

Local officials claim state actions are responsible for the new tax. Last year, the state legislature voted to stop sharing a portion of the state hotel tax with counties. That opened the door for local counties to impose their own tax, which they have promptly done.

Kauai, Maui and Hawaii counties had already adopted the surcharge.

Oahu Hawaii
(Photo by Clint Henderson/The Points Guy)

Revenue for the counties will, of course, depend on the health of the tourism economy. Hawaii has changed its entry requirements and restrictions with frequency throughout the coronavirus pandemic. Nonetheless, the Honolulu Star-Advertiser estimates that Oahu will receive anywhere from $86-$99 million per year from the new tax by the end of the fiscal year 2027. 

Related: My top 5 things to do in Oahu, Hawaii

Those numbers are good news for Honolulu county, which is experiencing large budget deficits. One of its biggest headaches is a major shortfall in funding for the 20-mile light metro rail line set to run to the Ala Moana Center from East Kapolei.

Of course, traveling to Hawaii using points and miles will help offset the burden of those extra hotel taxes.

Featured image by Joseph Hostetler/The Points Guy.

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