Last week, Hawaii lawmakers passed a litany of tax hikes to cover the state’s overspending problem. Possibly to avoid public attention, the tax increases were quietly passed during a House-Senate Conference Committee meeting on Saturday, April 18 – shortly after the Tax Day Tea Parties took place around the country, including one on the Capitol steps.

Included in the slew of bills that are now on the Governor’s desk are:
  • Raising the cigarette tax from $2 to $3 per pack and the tax on smokeless tobacco products from 40% to a whopping 70%. Hawaii’s cigarette taxes have been raised 6 times in the last 7 years alone. (House Bill 1175 and House Bill 895)
  • Hiking the hotel occupancy tax from 7.25% to 9.25%. This comes even as Hawaii’s tourism industry has significantly declined. The state’s hotel occupancy rates in February dropped to 75% – the lowest level since 1991. (Senate Bill 1111)
  • Increasing the state’s top income tax rate to 12% – easily surpassing California’s 10.3% rate to become the nation’s highest. (House Bill 1747)
  • Raising the tax on sales of property and second home purchases. (House Bill 1741)
Governor Linda Lingle, a Taxpayer Protection Pledge signer, is expected to veto the tax hikes, but the legislature can easily override her veto. Democrats control the State Senate 23 to 2, and outnumber Republicans in the House 45 to 6.
Click here and here to read ATR’s letters to Governor Lingle urging her veto. Also, click here for a letter to the Legislature in opposition to the tax hikes.