Maui Adding New Tourism Tax as Traveler Numbers Continue to Rise

Tourists planning a trip to the Hawaiian island of Maui should be prepared to pay a new tourism tax designed to help offset the impact of the COVID-19 travel restrictions that devastated local economies.

According to The Associated Press, representatives in Hawaii overrode a veto from Hawaii Governor David Ige that would overhaul how the state funds the Hawaii Tourism Authority (HTA) and allocates tourism tax revenue to each county.

With the law now passed despite the opposition, counties across the island chain are permitted to collect a three percent tax from visitors staying at hotels and other short-term rentals. Before, local officials collected a 10 percent hotel tax and distributed a share to each county.

Maui County Council Chair Alice Lee said the tax would help the region bring in triple the revenue, with the island experiencing an influx of tourists as travel restrictions continue to be lifted and more people receive vaccines.

“This will help tremendously,” Lee told The AP. “Instead of $23 million, we’ll probably receive in the neighborhood of $50 to $70 million.”

As for how the government will fund the HTA without the funds raised by the transient accommodations tax, lawmakers announced plans to pay for the agency with money from the general fund moving forward. In 2021, the government used federal coronavirus relief funds.

State Representative Sylvia Luke said the old law diverted the funds to the most populated areas, but the new rules will see each county receive funds based on how many visitors they welcome, which will benefit Maui the most.