Hawaii Implements Historic Tax on Cruise Ships: A First in the Nation

Hawaii is set to introduce a new tax on cruise ship guests, marking a significant change in how travelers experience the Aloha State. On May 2, 2025, Hawaii’s legislature approved an increase to the transient accommodations tax, which will now include cruise passengers for the first time. This law will take effect on January 1, 2026, imposing an 11% tax on cruise fares prorated for the duration that each ship is docked.

Previously, cruise visitors to Hawaii enjoyed tax-free travel, and in 2024, the state welcomed nearly one million cruise guests. The aim of the new tax is to ensure that all visitors contribute to the upkeep of Hawaii’s extensive conservation efforts, which protect the state’s unique landscapes and ecosystems. Governor Josh Green emphasized that good environmental policies encourage long-lasting tourism.

The funds raised from this tax are expected to amount to nearly $100 million annually, targeted at projects related to beach replenishment, hurricane preparation, and the management of invasive species affecting native flora.

Despite the passage of the tax, there has yet to be an official response from cruise lines regarding how this will affect their itineraries. Hawaii poses challenges for cruise access, being 2,600 miles from California, which may lead to adjustments primarily impacting cruises that sail exclusively in the region, like Norwegian Cruise Line’s Pride of America. The cruise industry has expressed discontent, with Norwegian Cruise Line having indicated they may reconsider their operations in Hawaii following this tax implementation.

Cruise travelers to Hawaii have the opportunity to engage in various excursions that highlight the state’s natural beauty and rich culture. Popular activities include visiting volcanic landscapes, snorkeling with sea turtles, and exploring historical sites, reflecting the diverse experiences that make the islands a sought-after destination for travelers.

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