City council approves additional 3% tax on Oahu lodging

HONOLULU — The Honolulu City Council has approved a measure to levy an additional 3% tax on hotel and other transient accommodations.

The bill passed Wednesday still needs to be signed by Mayor Rick Blangiardi. The Honolulu Star-Advertiser reported he supports the measure.

The bill “ensures our ability to fund vital city functions, including police and fire protection, facility and infrastructure maintenance, improvements to parks, beaches, roads, and will help fund the rail project,” Blangiardi said in a statement.

The local tax will be in addition to the state’s 10.25% hotel tax.

State lawmakers ended a county sharing structure of the state tax which previously distributed about $130 million per year to the various islands. Oahu had received 44%, or about $45 million, of that fund.

Counties can now implement their own transient accommodations tax up to 3%, which applies to lodging businesses like hotels, timeshares and vacation rentals.

Much of the tax revenue will be used to fund Honolulu’s troubled commuter rail project. Some of the funds will also be used to maintain and enhance natural resources that are strained by tourism.