Cruise Industry Fights Back: CLIA Sues Over Controversial Hawaii “Green Fee

In a legal challenge taking place in Honolulu’s federal court, a coalition of cruise line operators, tour companies, and suppliers have filed a lawsuit against Hawaii’s new "Green Fee" law. This legislation extends the Transient Accommodations Tax (TAT) to cruise ship tourists, leading to the case being referred to as Cruise Lines International Association, Inc. v. Suganuma.

The plaintiffs, represented by the Cruise Lines International Association (CLIA), argue that the law constitutes an unconstitutional burden on vessels docking in Hawaiian waters. They are seeking a preliminary injunction to halt the enforcement of the law, claiming it violates the U.S. Constitution’s Tonnage Clause, which prohibits states from imposing fees for entering or using ports. It also invokes the Rivers and Harbors Act to challenge local taxation on navigation.

The new law, which became effective in May 2025, imposes an 11% tax on cruise passengers based on their gross fares, which is prorated for the duration they are docked in Hawaii. Additionally, counties may impose a further 3% surcharge, potentially bringing the total to 14%. Comparatively, the TAT for land-based accommodations increased from 10.25% to 11%, with additional county levies and a general excise tax leading to a combined burden nearing 19%.

CLIA’s lawsuit highlights the potential negative economic impact this fee could have on cruise tourism. They express concerns that families planning trips to Hawaii in 2026 may reconsider their plans due to increased costs, which could disrupt established travel schedules. Moreover, cruise tourism is crucial for the Hawaiian economy, contributing approximately $639 million in economic impact, and generating $116 million in tax revenue along with around 3,000 jobs in 2023.

Currently, state officials, including various prosecuting entities and the Attorney General’s Office, have remained silent on the matter as they are still reviewing the complaint. A hearing on the case is scheduled for October 31, 2025.

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