Hawaii Supreme Court Lets Booking.com Challenge Online Booking Tax
Hawaii's Supreme Court ruled Booking.com has standing to challenge the state's online booking fee tax.
Why it matters: This ruling breaks ground by allowing an out-of-state digital platform to contest state tax laws. It could shape future legal battles over taxes imposed on e-commerce and online marketplaces.
- On August 8, 2026, Hawaii’s Supreme Court granted Booking.com standing to challenge the online rental booking tax.
- Act 96, effective January 1, 2026, raised Hawaii’s Transient Accommodations Tax from 10.25% to 11.00% and extended it to cruise ship operators.
- The Hawaii Department of Taxation detailed these tax changes in Announcement No. 2025-03 issued June 9, 2025.
- Hawaii’s government aims to use the tax to help preserve natural resources and support residents, per Governor Josh Green.
On August 8, 2026, the Hawaii Supreme Court ruled that Booking.com, though based out-of-state, has legal standing to challenge Hawaii’s recently expanded online rental booking fee tax. This case centers around Act 96, which took effect on January 1, 2026, and increased the Transient Accommodations Tax (TAT) rate from 10.25% to 11.00%.
Act 96 also broadened the tax's scope to include cruise ship operators’ gross rental proceeds, reflecting Hawaii’s efforts to capture revenue across various tourism-related sectors. The Department of Taxation communicated these changes through Announcement No. 2025-03 in June 2025.
The court’s decision is a procedural win for Booking.com since out-of-state defendants often face hurdles establishing standing in state tax disputes. This precedent potentially opens the door for more digital platforms to legally contest state-imposed taxes affecting e-commerce transactions.
Governor Josh Green underscored the tax's rationale, stating, "We must protect and preserve Hawaiʻi’s natural resources and safeguard the health of our residents. Visitors who benefit from our island’s resources have a shared responsibility to help preserve them." This tax aims to balance tourism's economic benefits with conservation and community needs.
While the Supreme Court did not publicly provide detailed reasoning for granting standing, the decision marks a key moment in the evolving legal landscape surrounding digital commerce and state tax authority.
By the numbers:
- 11.00% — Hawaii's Transient Accommodations Tax rate after January 1, 2026 increase
- August 8, 2026 — Date of Hawaii Supreme Court ruling allowing Booking.com standing to challenge the tax
- June 9, 2025 — Date of Hawaii Department of Taxation's announcement detailing tax changes