Cruise Industry Takes Legal Action Against Hawaii’s Tourism Tax for Climate Change Solutions

A lawsuit has been filed in Hawaii challenging the constitutional validity of a newly enacted tourism tax aimed at addressing climate change impacts. This tax, set to start next year, levies an 11% charge on cruise ship passengers’ bills, on top of existing hotel taxes, to generate nearly $100 million annually for efforts such as combating eroding shorelines and mitigating fire risks.

The legislation, signed by Governor Josh Green, is positioned as the first of its kind in the U.S. to target the cruise industry for climate change funding. However, the Cruise Lines International Association argues this tax is unjust and unconstitutional, claiming it represents an improper attempt by the state to generate revenue at the expense of navigable U.S. waters.

In the lawsuit, filed in U.S. District Court in Honolulu, the plaintiffs contend that such charges do not exist in any other state and claim they could deter potential visitors who might opt for more affordable cruising destinations. They argue that the law could adversely affect the local economy, which relies heavily on the cruise industry, bringing in roughly 300,000 visitors each year and supporting thousands of jobs.

The lawsuit has called for an expedited review, warning that families typically plan vacations well in advance, and this tax could skew the market even before its implementation. Alongside an 11% tax on cruise fares, hotels in Hawaii will also face increased taxes, with projections of a nearly 19% combined rate on accommodations once local surcharges are added.

Hawaii’s attorney general has not commented on the litigation as it is still under review, and local officials have declined to provide statements while the case proceeds.

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