HONOLULU (AP) — A federal judge’s ruling clears the way for Hawaii to include cruise ship passengers in a new tourism tax to help combat climate change that would take effect in early 2026.
U.S. District Judge Jill A. Otake on Tuesday rejected a request to block officials from enforcing the new cruise law.
Hawaii Gov. Josh Green signed legislation in May to raise tax revenue to combat shoreline erosion, wildfires and other climate issues, the first tax of its kind in the U.S. to help combat a warming planet. Officials estimate the tax will bring in nearly $100 million annually.
The tax raises the price of hotel rooms and vacation rental accommodations, but also imposes a new 11% tax on the total fare paid by cruise ship passengers starting next year, prorated based on the number of days the cruise ship is in port in Hawaii.
The Cruise Lines International Association challenged the tax in a lawsuit along with a Honolulu company that provides supplies and regulations to cruise and tourism businesses on Kauai and the Big Island that rely on cruise ship passengers. One of their arguments is that the new law violates the Constitution by taxing cruise ships entering Hawaii ports.
Plaintiffs’ attorneys also argued the tax would hurt the tourism industry by making cruises more expensive. The lawsuit states that the law authorizes counties to charge an additional 3% surcharge, bringing the total cost to 14% of the prorated fare.
“Cruise tourism brings nearly $1 billion in total economic impact to Hawaii and supports thousands of local jobs, and we remain committed to ensuring continued success on a legal, sustainable basis,” association spokesman Jim McCarthy said in a statement.
The plaintiffs will appeal, according to court records.
Hawaii Attorney General Anne Lopez said in a statement that Hawaii will continue to defend the law, which requires cruise ship operators to pay their share of the transient lodging tax to combat climate change threats facing the state.
The U.S. government intervened in the case, calling the tax a “scheme to extort American citizens and businesses solely for the benefit of Hawaii” and in conflict with federal law.
Plaintiffs and Justice Department attorneys filed motions Wednesday seeking to maintain the status quo pending the appeal. Otake vetoed the motion.