The Hawaiian Islands offer a unique natural beauty not found in any other state in America. The island chain, which lies approximately 2,500 miles from the U.S. mainland, stands as a jewel set in the heart of the Pacific Ocean. Visitors from all over the world flock to the islands to experience paradise. Many do so on mega cruise ships, which emit as much CO2 as 12,000 cars per day, and use as much energy as a small town.
The state of Hawaii has taken steps to combat the waste and energy consumption of these mega vessels. Starting next year, the state will begin collecting a “green fee” for visiting cruise ships, but not everyone agrees it is a good idea. And by “not everyone,” we mean cruise lines, which obviously aren’t big on the idea of paying money to Hawaii if they don’t have to.
Hawaii found itself in federal court in Honolulu on November 14, 2025, as the Cruise Lines International Association (CLIA) and other plaintiffs argued for a preliminary injunction against Act 96, scheduled to take effect on January 1, 2026. The lawsuit claims that the Act is both an infringement of the Rivers and Harbors Appropriation Act of 1884 and a violation of the cruise industry’s rights under the tonnage clause of the U.S. Constitution.
Both cruise ship operators and vacation tour operators are attempting to avoid paying a surcharge and higher rates on Hawaii’s transient accommodations tax (TAT) for using Hawaii ports. The suit also claims that Act 96’s provisions, which require CLIA and its agents to publicly support the new fees, violate First Amendment rights for freedom of speech.
Hawaii countered on September 19 with the Hawaii Department of Taxation’s motion to dismiss. It suggests that any issues with Act 96 are a matter of state rather than federal law, while also questioning the standing of plaintiffs who won’t be subject to a contested $15 registration fee. If allowed to stand by U.S. District Court Judge Jill Otake, Act 96 will be the first active climate impact fee.
Are You Saying “Aloha” as a Hello or a Goodbye?
For Hawaii, tourism is by far the largest industry. Hawaii cruise ship passengers flock to the four biggest islands of the archipelago — Oahu, Maui, Kauai, and the Big Island (Hawaii). Citing the need to sustainably manage tourism while mitigating hazards and promoting environmental stewardship, Governor Josh Green signed Act 96 into law on May 27, 2025.
In addition to increasing the TAT rate by 0.75%, the initiative would also apply the Hawaii tax to cruise ships using its ports, effective at the start of 2026. Previously, cruise ships did not pay the TAT, which is levied on other tourism industries, like hotels, vacation rentals, and resorts.
Understandably, those associated with the cruise ship industry in any way are less than thrilled about the new law they’re facing. The plaintiffs assert that any state tax based on tonnage in navigable waters requires congressional approval. Attorneys for CLIA state that the new tax’s addition of 11% state and 3% Hawaii county surcharges on cruise ship fares, a per-ship registration fee, and being compelled to give notice and disclosure about Act 96 will cause serious economic damage to the industry.
DOJ Intervention
While Act 96 would cut into profits, it’s not clear cruise ship giants like Norwegian Cruise Lines and others would give up on the destination if they lose in the District of Hawaii federal courtroom. Judge Otake didn’t offer an immediate ruling on any of the motions before the court but promised to do so as quickly as possible. That might get delayed as Hawaii requested additional time to assess and respond to a motion by the Department of Justice (DOJ), which intervened at the last moment.
Related Resources
- U.S. Navy Must Face Claims of Fuel Contamination in Hawaii (FindLaw’s Courtside)
- Will the Hawaii Fire Class-Action Settlement Be Allowed To Stand? (FindLaw’s Courtside)
- Climate Lawsuits Will Continue After SCOTUS Declines To Intervene (FindLaw’s Federal Courts)
