A federal appeals court blocked Hawaii from enforcing a climate change tourist tax on cruise ship passengers on New Year’s Eve, halting the measure while an appeal proceeds, the Associated Press reported.
The tax, set to begin at the start of 2026, was challenged in court by the Cruise Lines International Association. In its lawsuit, the group argued the new law violates the U.S. Constitution by taxing cruise ships for entering Hawaii ports, and it said the tax would make cruises more expensive.
The levy is structured to affect several parts of Hawaii’s tourism economy. The lawsuit said the law increases rates on hotel room and vacation rental stays, and it also imposes a new 11% tax on the gross fares paid by a cruise ship’s passenger. The passenger fare tax is prorated for the number of days the vessels are in Hawaii ports, the AP reported.
In addition, the lawsuit said the law authorizes counties to collect an additional 3% surcharge, which it described as bringing the total to 14% of prorated fares. Hawaii Gov. Josh Green signed the legislation in May, and officials estimated the tax would generate nearly $100 million annually, according to the AP report. The revenue is intended to help address eroding shorelines, wildfires and other climate problems, the report said.
The legal fight reached the federal district court, where U.S. District Judge Jill A. Otake upheld the law and the plaintiffs appealed to the 9th U.S. Circuit Court of Appeals. The U.S. government intervened in the case and also appealed Otake’s ruling, the AP said.
Two judges on the 9th Circuit granted an injunction pending the appeal, temporarily halting enforcement of the cruise-ship provisions while the litigation continues. Toni Schwartz, a spokesperson for the Hawaii attorney general’s office, said in an email that, “We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits,” and that the order “temporarily halts enforcement of the law on cruise ships while the appeals process moves forward,” according to the AP.
The AP reported that the lawsuit challenged only the law’s cruise ship provisions. Jim McCarthy, a spokesperson for Cruise Lines International Association, said he was not sure he could get comment from the plaintiffs because the ruling came before a holiday, the report said.
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