Key Aspects:
- A federal judge has denied efforts to stop Hawaii’s new cruise tax from going into effect.
- The “green tax” will impose an 11% tax on cruise fares, in addition to a 3% TAT tax.
- Cruise Lines International Association and its fellow plaintiffs plan to appeal the decision.
The cruise lines and local tourism operators are not getting the Christmas present they were hoping for – at least not in Hawaii.
On Tuesday, December 23, 2025, US District Judge Jill A. Otake officially denied a request to stop Hawaii’s first-ever cruise ship tax from going into effect on January 1, 2026.
The new law, which was first passed in May, imposes an 11% tax on cruise fares, prorated for the days that vessels call at Hawaiian ports. This is in addition to a 3% transient accommodations tax (TAT).
The Cruise Lines International Association (CLIA) joined forces with several local plaintiffs, including two tour companies that serve cruise ships, to try to block the tax from going into effect.
In a lawsuit filed on August 27, 2025, CLIA and its comrades alleged that the new tax unfairly targeted cruise ships and violated the First Amendment to the US Constitution.
However, these efforts were ultimately unsuccessful. Per the court ruling, the tax will go into effect on January 1.
The Purpose of the Tax
Hawaii isn’t proposing this tax just to be mean to cruise lines and their passengers, but rather to address the threats of climate change in the Aloha state.
The purpose of this “green tax” is to ensure all visitors – including cruise ships and their passengers – help with the state’s hefty conservation costs to protect the natural beauty and wildlife on the islands.
“We must protect and preserve Hawaiʻi’s natural resources and safeguard the health of our residents. Visitors who benefit from our island’s resources have a shared responsibility to help preserve them,” Governor Josh Green said.
“The Green Fee ensures that the resources needed to protect Hawaiʻi are available for future generations,” he continued.
The new tax is estimated to rake in around $100 million annually, which will be put toward sustainability and other environmental efforts.
But while this benefits Hawaii, it puts a greater financial strain on cruise lines and their passengers and will likely lead to rising costs for Hawaii-bound sailings.
Brands like Norwegian Cruise Line and Disney Cruise Line have already begun warning passengers of the new tax and passing on the extra fees to them.
The Legal Battle Isn’t Over
Despite this week’s ruling, CLIA isn’t ready to accept defeat just yet. CLIA and its fellow plaintiffs plan to appeal the court’s decision.
“Cruise tourism generates nearly $1 billion in total economic impact for Hawaii and supports thousands of local jobs, and we remain focused on ensuring that success continues on a lawful, sustainable foundation,” CLIA spokesperson Jim McCarthy said in a statement.
Hawaii, meanwhile, has vowed to continue to defend the law.
“The Department of the Attorney General is very pleased with today’s decision. The vast majority of the cruise industry’s claims were dismissed,” said Attorney General Anne Lopez.
“While the litigation is not over, we are confident in the legality of this law and will continue to vigorously defend it on behalf of the people of Hawaiʻi,” she continued.
The plaintiffs have also requested an injunction pending an appeal that would at least delay the tax from going into effect until the legal battle is over.
It’s unclear what the judge will decide on this matter, but CLIA and its partners have requested a decision on the requested delay by Saturday, December 27.
