URGENT UPDATE: A federal appeals court has just blocked Hawaii from enforcing its groundbreaking climate change tax on cruise ship passengers. This ruling, delivered on New Year’s Eve, halts a law set to take effect in 2026, which would have imposed an 11% tax on gross fares for cruise passengers, combined with a 3% surcharge, totaling 14% on prorated fares.
The Cruise Lines International Association (CLIA) challenged the tax, arguing it violates the U.S. Constitution by taxing ships entering Hawaii ports, effectively making cruises more costly for travelers. The tax was introduced by Hawaii Governor Josh Green as part of an effort to generate nearly $100 million annually for climate-related issues such as eroding shorelines and wildfires.
The ruling comes after U.S. District Judge Jill A. Otake upheld the law last week, prompting an appeal to the 9th U.S. Circuit Court of Appeals. The court has granted an injunction that temporarily halts the tax while the appeals process is underway.
In an official statement, Toni Schwartz, spokesperson for the Hawaii attorney general’s office, expressed confidence in the law’s legality: “We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits.”
The implications of this ruling are significant. Hawaii’s tax was poised to be the first of its kind in the nation aimed at combating climate change through tourism revenue. The temporary injunction affects only the cruise ship provisions, but it raises questions about the future of Hawaii’s climate initiatives and their financial support.
Travelers and tourism operators are watching closely as the legal battle unfolds. The cruise industry, which has been recovering from pandemic impacts, is particularly concerned about the potential rise in costs associated with this tax.
As the situation develops, stakeholders on all sides are eager to see how the appeals process will impact Hawaii’s climate policies and the tourism sector. Stay tuned for further updates as this urgent story unfolds.
