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Federal appeals court blocks New Year’s Eve ruling hawaii A climate change tourism tax on cruise ship passengers will come into effect in early 2026.
The Cruise Lines International Association challenged the tax in a lawsuit, arguing that the new law’s tax on cruise ships entering Hawaii ports violates the U.S. Constitution. They also think it will make cruising 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.
The tax increases 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, prorated based on the number of days the cruise ship is in port in Hawaii. The lawsuit states that the law authorizes counties to charge an additional 3% surcharge, bringing the total cost to 14% of the prorated fare.
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.
U.S. District Judge Jill A. Otake upheld the law last week, and the plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit. The U.S. government intervened in the case and appealed Otake’s ruling.
An order from two judges on the Ninth Circuit granted both requests for an injunction pending appeal.
“We continue to believe Act 96 is legal and will be vindicated when the merits are heard on appeal,” Toni Schwartz, a spokesman for the Hawaii Attorney General’s Office, said in an email.
Her email noted that the order temporarily halts enforcement against cruise ships while the appeals process continues.
The lawsuit challenges only the cruise ship provision of the law.
Jim McCarthy, a spokesman for the Cruise Lines International Association, said he was unsure whether he would be able to get comment from the plaintiffs, given the timing of the ruling before the holidays.