UPDATE: A federal appeals court has just blocked Hawaii’s groundbreaking climate change tourist tax on cruise ship passengers, a ruling that halts enforcement of the levy set to begin on January 1, 2026. The Cruise Lines International Association challenged the law, claiming it violates the U.S. Constitution by imposing a tax on cruise ships arriving at Hawaiian ports.
This urgent ruling comes after U.S. District Judge Jill A. Otake upheld the law last week. The 9th U.S. Circuit Court of Appeals has now granted an injunction pending the appeals process, effectively putting a pause on the tax that would have imposed an additional 3% surcharge on already hefty cruise fares, raising the total to 14% of prorated fares.
The proposed tax, signed into law by Hawaii Governor Josh Green in May, aimed to generate nearly $100 million annually to combat climate challenges such as eroding shorelines and wildfires. This would have marked Hawaii as the first state in the nation to levy such a tax targeting cruise tourism in response to climate change.
The legal battle intensified as the U.S. government intervened, appealing Judge Otake’s ruling. According to Toni Schwartz, spokesperson for the Hawaii attorney general’s office, “We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits.”
The ruling has immediate implications for Hawaii’s tourism industry, with many fearing that the tax would have made cruises less affordable, impacting both visitors and local economies. Jim McCarthy, spokesperson for the Cruise Lines International Association, noted he was unable to comment further on the plaintiffs’ reaction due to the timing of the ruling over the holiday season.
As the appeals process unfolds, all eyes will be on how this pivotal case influences the future of climate-related taxation in tourism and its broader implications for environmental policy across the United States. Stay tuned for more updates as this situation develops.
