Norwegian Cruise Lines has begun charging passengers Hawaii’s transient accommodations tax and the related “green fee” for time spent in port, even though a federal appellate court injunction bars Hawaii tax officials from collecting those dollars on cruise stays, according to the Associated Press.
The move comes as the cruise industry seeks to overturn in court parts of Hawaii’s green fee law that require ships to pay the same transient accommodations tax as hotels and vacation rentals. Federal appellate judges issued the injunction on New Year’s Eve, hours before it was set to take effect.
Norwegian representatives said the company will refund passengers if the industry ultimately prevails in court, the AP reported.
It was not clear, the report said, whether all other cruise lines that stop in Hawaii’s ports are charging passengers the tax while the injunction is in place, or whether the cruise industry’s main trade group is providing uniform guidance. Only two other major lines that stop in Hawaii responded to requests for comment.
Oceania Cruises told AP it does not have the taxes attached to its next Hawaii cruises, which are scheduled for October. A Royal Caribbean spokesperson referred questions about whether the company was charging passengers to the Cruise Line Industry Association, saying the issue is industrywide, the AP reported.
In a statement, the Cruise Line Industry Association said decisions about how to handle potential charges during ongoing litigation are individual commercial decisions made by each cruise line: “Decisions about how to handle potential charges during ongoing litigation are individual commercial decisions made by each cruise line,” the association said.
Passenger accounts highlighted the practical impact of the dispute. Dallas resident Don Yonce, who was aboard Norwegian’s Pride of America, said the company notified him by email in October that his cruise would add Hawaii’s 14% state and county transient accommodations taxes for any time spent in port. The email estimated Yonce would be charged $1,035 in transient accommodations taxes based on the weeklong cost of his family’s cabin suite, the AP reported.
Yonce said he was surprised to receive an invoice during an interisland voyage Sunday that included the charge. He said guest service managers told him and other passengers that the injunction stopped the state from collecting the tax, but that they were “told by corporate to charge it anyway,” according to the AP report.
Yonce also said he and other passengers were similarly irked by seeing the additional line item. He said he believed Norwegian was undermining its legal position because the company has argued in court that the tax would cause irreparable harm to passengers, suppliers and the company itself, while continuing to collect it.
Hawaii’s officials, meanwhile, have said the tax increase that created the green fee is aimed at environmental protection and disaster resilience. The AP reported that state officials estimated the recent 0.75 percentage point increase to the transient accommodations tax would generate around $100 million a year, to help shield Hawaii’s environment from overtourism, wildfires and other natural disasters, and the growing impacts of climate change.
The AP said Gov. Josh Green has estimated that the cruise industry’s portion represents about 10% of those green fee dollars. The cruise industry’s lawsuit continues in federal court, with a next hearing scheduled for Jan. 26, the AP reported.