Federal appeals court blocks Hawaii’s climate change tourist tax on cruise ships
A federal appeals court ruling on New Year’s Eve blocked Hawaii from enforcing a tourist tax on climate change on cruise ship passengers, a tax which was to come into force at the beginning of 2026.
The Cruise Lines International Association challenged the tax in a lawsuit, arguing that the new law violates the U.S. Constitution by taxing cruise ships entering Hawaii ports. They also argued that it would make cruises more expensive.
The levy increases rates on hotel room stays and vacation rentals, but also imposes a new 11 percent tax on gross rates paid by cruise ship passengers, prorated to the number of days the ships spend in Hawaii ports. The lawsuit notes that the law allows counties to levy an additional 3 percent surcharge, bringing the total to 14 percent of the prorated rates.
In the first such levy implemented in the nation to help address global warming, Hawaii Gov. Josh Green signed a law in May that increases tax revenue to address shoreline erosion, wildfires and other climate problems. Authorities estimate that this tax would generate nearly $100 million per year.
U.S. District Judge Jill A. Otake last week upheld the law, and the plaintiffs appealed to the 9th U.S. Circuit Court of Appeals. The U.S. government intervened in the case and also appealed Otake’s decision.
The order from two 9th Circuit judges granted both requests for injunctive relief pending appeals.
“We remain confident that Act 96 is legal and will be vindicated when the appeal is heard on its merits,” Toni Schwartz, a spokeswoman for the Hawaii Attorney General’s Office, said in an email.
The order temporarily suspends enforcement of the law on cruise ships while the appeal process moves forward, his email said.
The lawsuit challenged only provisions of the cruise ship law.
Cruise Lines International Association spokesman Jim McCarthy said he wasn’t sure if he would be able to get a comment from the plaintiffs, given that the ruling came before a holiday.
