Hawaii Introduces 11% Cruise Passenger Tax to Support Environmental Initiatives

Effective January 1, 2026, Hawaii will implement an 11% Transient Accommodations Tax (TAT) on cruise ship passengers, marking a pivotal shift in state policy aimed at environmental conservation. This tax was previously only applicable to hotel accommodations but will now be prorated based on the length of time cruise ships are docked in Hawaii.

For example, if passengers are on a 14-night voyage and spend three nights in Hawaiian waters, they will be taxed only for those specific three nights. This legislative measure is expected to generate around $100 million annually, with the revenue designated for environmental protection initiatives, including beach restoration, infrastructure upgrades to withstand storms, and invasive species removal.

Responses from the cruise industry have varied, particularly from Norwegian Cruise Line (NCL). The operator of the Pride of America, which offers weekly 7-night cruises within the Hawaiian Islands, has voiced opposition to the new tax. NCL has even hinted at potential legal action or withdrawing their year-round vessel from Hawaii due to the financial implications of this tax.

Governor Josh Green supports the bill, which will make Hawaii the first U.S. state to directly correlate tourism tax revenue with funds for environmental and climate resilience programs.

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