Hawaii Imposes Cruise Passenger Tax to Fund Climate Efforts Amid Legal Challenges
A Hawaii law authorizes an 11% cruise passenger tax prorated by port days, adds a 3% county surcharge, and raises hotel taxes to fund resilience.
Overview
Hawaii approved a climate-change tax package imposing an 11% cruise passenger tax prorated by port days, plus a 3% county surcharge, with enforcement starting next year.
The measure also raises hotel and vacation rental taxes in Hawaii to fund climate resilience projects such as erosion control and wildfire mitigation.
A coalition including Cruise Lines International Association challenged the law, arguing it violates the Constitution by taxing cruise ships entering Hawaii ports.
A federal judge allowed enforcement of the cruise tax; Judge Jill A. Otake denied an injunction, and plaintiffs plan to appeal before January 1.
Officials estimate the new tax will generate nearly $100 million annually to fund climate protections, with the total tax potentially reaching 14% of prorated cruise fares.
Analysis
Center-leaning sources frame the story by emphasizing the legal and economic implications of Hawaii's climate change tax on cruise passengers. They highlight the federal judge's decision as a pivotal moment, using neutral language to present both sides: the state's environmental goals and the cruise industry's economic concerns. The coverage balances perspectives by quoting officials and industry representatives, ensuring a comprehensive view without overt bias.
Sources (3)
FAQ
Hawaii’s law extends the state Transient Accommodations Tax (TAT) to cruise fares at an 11% rate prorated by the number of days a ship is in Hawaii ports, allows counties to add a 3% surcharge, and raises hotel/vacation rental taxes; combined state and county surcharges can bring the total tax on prorated cruise fares to about 14% and officials estimate the package will generate nearly $100 million annually.
The tax is scheduled to take effect January 1, 2026, and under the law cruise ships will not be permitted to call Hawaii ports without paying the fee unless a court order blocks enforcement.
A coalition led by Cruise Lines International Association and allied businesses sued to block the law, arguing it violates constitutional provisions (including challenges tied to federal maritime authority such as the Tonnage Clause) and that the state cannot impose the levy on vessels entering U.S. ports; the federal government has also intervened supporting the industry’s challenge.
U.S. District Judge Jill A. Otake denied a request for an injunction and allowed Hawaii to begin enforcing the cruise tax, but the plaintiffs have indicated they will appeal the decision before January 1, 2026.
State officials say the revenue—estimated at nearly $100 million per year—will fund climate resilience projects such as erosion control and wildfire mitigation and other measures to protect communities and infrastructure from climate impacts.
History
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