An appellate court is scheduled to consider a temporary hold on a first-in-the-nation 11% tax on passenger cruise ships sailing to the Hawaiian islands — but not before the state begins collecting the tax. The “green fee” to fund climate change mitigation is set to take effect on Jan. 1.
The Ninth District appellate panel is scheduled to have its first hearing on Monday with subsequent hearings scheduled through February.
To battle the growing costs of climate change on the Pacific Island chain, Gov. Josh Green signed Act 96 into law in May.
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“As an island chain, Hawaiʻi cannot wait for the next disaster to hit before taking action,” Green said in a release. “We must build resiliency now, and the Green Fee will provide the necessary financing to ensure resources are available for our future.”
When the law takes effect, it will make Hawaii the only state in the U.S. to impose such a tax on cruise ships. Other countries do impose a similar tax, however.
Along with a 3% county Transient Accommodations Tax, or TAT, vacationers whose cruise ship docks or anchors in Hawaii will see additional charges that the cruise line industry says will be added to passengers’ bills. The new law will apply the state TAT to cruise ships based on days at port where it previously only applied to hotels and other vacation rentals.
State officials estimate the new law will bring in $100 million annually, according to court filings.
District Judge Jill A. Otake on Dec. 23 denied the plaintiffs’ request for a temporary hold on the law taking effect.
“While the litigation is not over, we are confident in the legality of this law and will continue to vigorously defend it on behalf of the people of Hawaii,” Hawaii Attorney General Anne Lopez said in a statement.
The suit
The Cruise Lines International Association and other Hawaiian businesses sued in August to stop the law from taking effect. They said in their complaint that the law compels free speech, violates the constitutional ban on states charging ships to dock, and the federal Rivers and Harbors Appropriation Act of 1884.
“For an average family, Act 96 will add hundreds of dollars to the cost of popular cruise itineraries that dock in Hawai‘i ports. That substantial price increase will cause many families to forego trips to Hawai‘i in favor of other destinations, reducing the number of passengers who otherwise would visit Hawai‘i ports on vessels operated by CLIA’s members,” the complaint states.
The federal government intervened on behalf of the cruise lines, saying the law is unconstitutional.
According to CLIA, global cruise-linked spending in Hawai’i reached over $330 million in 2023. The lawsuit states cruise lines bring nearly 300,000 annual visitors to the state.
Editor’s note: This story has been updated since initial publication to correct the date of a ruling and other minor typographical errors.
