Federal Court Puts a Pause on Hawaii’s Controversial Cruise Tax
A federal appeals court has temporarily blocked Hawaii from enforcing a controversial 11% cruise passenger tax. The tax was set to take effect on January 1, 2026. The Ninth Circuit Court of Appeals issued an injunction on New Year’s Eve. This followed a lawsuit by the Cruise Lines International Association (CLIA), which challenged the tax as unconstitutional.
The tax, part of Hawaii’s Act 96 known as the “Green Fee,” was designed to raise revenue for climate change mitigation efforts. This includes funding for the Climate Mitigation and Resiliency Special Fund. The levy would have imposed an 11% tax on gross cruise fares. Counties were authorized to add an additional 3% surcharge, bringing the total potential tax to 14% of prorated fares.
The cruise industry argued that the tax violates the U.S. Constitution. This is because it taxes cruise ships for entering Hawaii ports and would make cruises significantly more expensive for passengers. The U.S. Department of Justice intervened in support of the appeal. While the cruise tax has been halted, increased hotel and vacation rental taxes went into effect as scheduled. Hawaii’s attorney general’s office expressed confidence that the law will be vindicated when the appeal is heard on its merits.
Source: Fox News