New $3/Day Tax On Maui Car Rentals Returns to Hawaii State Senate

Jan. 30, 2026. A proposal to impose an additional $3/day tax on Maui Car rentals has returned to the Hawaii State Legislature. If passed, the new tax would be added to the existing daily Rental Motor Vehicle Surcharge Tax, and would bring the daily flat tax on Maui's car rentals to a total of $11/day beginning in January 2027. This would be in addition to other existing Maui car rental taxes and fees, and would apply to all car rental and car-sharing operations, including airport rentals, off-airport rentals, local company rentals, and car-sharing operations like Turo and Uber.

As we reported previously, Hawaii Senate Bill 1659 was introduced in the 2025 legislative session, sponsored by Sen. Angus McKelvey [D], with the purpose of adding to the funding of an extension of the Lahaina Bypass highway. It passed a vote by the Senate committee for Transportation and Culture and the Arts, and was submitted to the Senate Ways and Means Committee, where it remained until the close of the legislation session in May 2025.

As we also reported last year, In public testimony the bill had popular support, but many of its details were considered problematic by public interest groups and by the state agencies charged with collecting and managing the tax and the funds for the construction of the bypass.

The Senate will have to iron out all the details by the end of this year's legislative session in May 2026 in order for the new tax to go into effect in 2027, provided that the Hawaii Department of Taxation can implement the collection of the tax in time for the start of the year.

We will continue to monitor the progression of this bill through the legislature, and we will report on any developments as they arise.

ABOUT THIS BLOG

Frank Saab is the editor of this blog published by Frank's Friendly Cars Maui Car Rental LLC, an independent car rental company operating in Maui, Hawaii, since 2006. Frank's offers low prices on used local cars and discount prices on new cars, with a "Lowest Price Guarantee" that assures you of getting the best deal on your rental. Visit our website at www.mauicarrental.biz, or call us at 808-280-1196.