Hawaii’s New Cruise Tax Upheld: 11% Levy to Commence on January 1, 2026
A federal judge has recently dismissed the cruise industry’s plea to halt Hawaii’s contentious new Transient Accommodations Tax (TAT) on cruise passengers. This decision allows the 11% levy to be implemented as planned on January 1, 2026. The tax expansion, which is applied to cruise fares prorated for days spent in Hawaiian ports, has incited significant opposition from cruise lines such as Norwegian Cruise Line and the Cruise Lines International Association (CLIA).
Norwegian Cruise Line has already started notifying passengers about the additional costs, which vary from $50 to $500 per person based on the itinerary. For instance, a family of four embarking on a seven-day inter-island cruise aboard the Pride of America could see an increase of up to $1,400 to their total cost. The cruise industry contends that the tax is unconstitutional and could potentially damage Hawaii’s tourism economy, which benefits from nearly $1 billion in economic impact from cruise tourism annually.
Despite the court ruling on December 26, CLIA intends to challenge the decision. The tax is projected to generate approximately $100 million annually for environmental conservation, climate resilience initiatives, and infrastructure improvements across the Hawaiian Islands. U.S. District Judge Jill A. Otake pointed out that blocking the law would give cruise ships preferential treatment over hotels already subjected to the tax.
Source: www.thetravel.com