Federal ruling blocks Hawaii's climate change tourist tax on cruise ships [View all]

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Last edited Thu Jan 1, 2026, 12:48 PM - Edit history (1)

Source: AP

Updated 9:26 PM EST, December 31, 2025


HONOLULU (AP) — A federal appeals court ruling on New Year’s Eve blocked Hawaii from enforcing a climate change tourist tax on cruise ships passengers, a levy that was set to go into effect at the start of 2026.

Cruise Lines International Association challenged the tax in a lawsuit, arguing that the new law violates the U.S. Constitution by taxing cruise ships for entering Hawaii ports. They also argued it would make cruises more expensive. The lawsuit notes the law authorizes counties to collect an additional 3% surcharge, bringing the total to 14% of prorated fares.

The levy increases rates on hotel room and vacation rental stays but also imposes a new 11% tax on the gross fares paid by a cruise ship’s passenger, prorated for the number of days the vessels are in Hawaii ports. The lawsuit notes the law authorizes counties to collect an additional 3% surcharge, bringing the total to 14% of prorated fares.

In the nation’s first such levy to help cope with a warming planet, Hawaii Gov. Josh Green signed legislation in May that raises tax revenue to deal with eroding shorelines, wildfires and other climate problems. Officials estimate the tax would generate nearly $100 million annually.

Read more: https://apnews.com/article/hawaii-tourist-tax-cruises-climate-change-dc41e5da8c2597df47256c109ba8c196