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Joint House committees pass 1-point hotel tax increase to fund Hawaiian Homes loan program
Summary
On Jan. 30, 2025, three House committees voted to pass House Bill 604 (HD1), raising the transient accommodations tax by one percentage point effective Jan. 1, 2026, with increased revenue directed to the Hawaiian Homes General Loan Fund under the Hawaiian Homes Commission Act of 1920 as amended.
A joint meeting of the House Committee on Tourism, the House Committee on Housing and the House Committee on Economic Development and Technology on Jan. 30, 2025, approved House Bill 604 (HD1), increasing the transient accommodations tax by one percentage point effective Jan. 1, 2026, and directing the additional revenue to the Hawaiian Homes General Loan Fund established under the Hawaiian Homes Commission Act of 1920, as amended.
The measure’s sponsor and committee chairs advanced the bill as amended to a committee report after a short public hearing and a brief recess for decision making. Tom Evslin, representing the Department of Hawaiian Homelands, expressed the department’s support. “We are strongly in support of this measure and we appreciate the introducers of this bill and what the intent is to try to find a source of consistent revenue that would help us fund the programs that we do,” Evslin said.
Opponents and commentators urged caution. Ted Kefalas of the Grassroot Institute of Hawaii argued against raising visitor taxes, saying Honolulu is already among the highest-taxed tourist destinations and that higher taxes risk hurting local businesses. “We seriously risk pricing ourselves out of the market,” Kefalas said. The Department of Taxation said it stood on written comments. The Tax Foundation of Hawaii submitted written concerns noting possible effects on economic performance.
Committee members received one testimony in support, two in opposition and four with comments, according to the hearing record. During committee votes, tourism and housing committee members approved the measure with amendments; the housing committee recorded one no vote and several excused members. The committees’ actions advance HB 604 as an HD1 toward further floor or committee-level processing.
The bill directs the incremental revenue into the Hawaiian Homes General Loan Fund, the vehicle cited by supporters as providing a stable funding source for Hawaiian Home Lands housing programs. The bill text ties the funding destination to the Hawaiian Homes Commission Act of 1920, as amended.
The committees adopted the chair’s recommendation to pass HB 604 with amendments; the chair noted a reservation from one member in the tourism committee and a single no vote in the housing committee. The bill will proceed as amended per committee rules.
