Hawaii court supports new Green Tax on cruise passengers to fund climate initiatives, despite industry legal challenges.
The U.S. District Court in Hawaii has denied a request for a preliminary injunction in a lawsuit filed by the cruise industry and its suppliers to halt a tax increase imposed on temporary visitors arriving via cruise ships. This decision paves the way for the regulation known as the "Green Tax," which has now been expanded to include cruise passengers.
The state of Hawaii introduced a law in May that includes an additional 0.75% increase in hotel and short-term rental taxes, set to take effect on January 1, 2026. This raises the total transient accommodation tax to 11%. Under the new regulation, cruise passengers will also be required to pay the same tax rate for the days their ships are in Hawaiian waters. Local governments may impose an additional tax of up to 3%.
The Hawaii administration argues that the Green Fee established by Act 96 of 2025 aims to ensure that cruise operators make a "fair contribution" to the state's efforts to combat climate change. The Governor of Hawaii emphasized that environmental considerations are crucial for attracting tourists, highlighting issues such as beach and coastal erosion and devastating wildfires.
State officials anticipate that the tax could generate approximately $100 million in annual revenue.
The cruise industry, represented by the Cruise Lines International Association (CLIA), filed a lawsuit claiming that the tax is unconstitutional under the U.S. Constitution. CLIA contended that states cannot impose taxes for port entry, as this authority belongs solely to Congress. They also argued that the tax is not directed at ports or services but will be transferred directly to state revenues.
However, Hawaii District Court Judge Jill Otake ruled that the cruise industry's claims did not sufficiently demonstrate a likelihood of legal success. The judge noted that granting a preliminary injunction would mean preferential treatment for cruise companies compared to land-based temporary accommodation businesses.
Hawaii Attorney General Anne Lopez stated after the decision, "The vast majority of the cruise tourism sector's claims have been dismissed. While the case is not yet over, we are confident in the legality of this law and will continue to defend it on behalf of the people of Hawaii."
At this stage, the court did not suspend the enforcement of the transient accommodation tax applied to cruise passengers, but noted that certain aspects related to federal rights could be re-evaluated in the future.
According to 2023 data, cruise ships bring approximately 3 million tourists to Hawaii annually, contributing to a total visitor count exceeding 9.6 million. The Green Tax is being closely monitored internationally as it is the first of its kind in the United States.
Similar measures are being considered in various regions around the world. Greece has begun implementing peak season fees, while proposals for environmental taxes on cruise ships are being discussed in France. The cruise industry argues that it already pays high fees and holds a small share of global maritime emissions.
Source: www.denizhaber.com
