Federal Court Blocks Hawaii’s Cruise Ship Climate Tax
In a recent turn of events, a federal appeals court has temporarily halted Hawaii’s plan to impose a climate-related tax on cruise ship passengers. This tax, initially slated to commence in 2026, was designed to address environmental challenges facing the state.
The legislation, signed by Hawaii Governor Josh Green in May, aimed to generate approximately $100 million annually. This revenue was intended to support efforts against coastal erosion, wildfires, and other climate change-related issues. The tax included a new 11% charge on cruise passenger fares, which, with an additional county-authorized 3% surcharge, would total 14% of prorated fares.
Cruise Lines International Association filed a lawsuit challenging the law, arguing it violated the U.S. Constitution by taxing vessels entering Hawaiian ports. They also raised concerns about increased costs for cruises. In response, U.S. District Judge Jill A. Otake upheld the law, prompting the plaintiffs to appeal to the 9th U.S. Circuit Court of Appeals. The U.S. government also joined the appeal against Otake’s ruling.
Two judges from the 9th Circuit granted an injunction, temporarily preventing the enforcement of the tax on cruise ships while the appeals are in progress. Toni Schwartz, spokesperson for Hawaii’s attorney general, expressed confidence in the law’s legality, stating, “We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits.”
The lawsuit specifically targets the tax provisions related to cruise ships. Jim McCarthy, spokesperson for the Cruise Lines International Association, mentioned uncertainty about obtaining comments from the plaintiffs due to the timing of the ruling.
