Hawaiian lawmakers have failed in an attempt to impose climate change levies on cruise ships, after the tax was challenged in court by a cruise trade association. After initial approval by a district judge, the new legislation has now been temporarily blocked by US Circuit Court of Appeals judges.
The fiscal eco move by Hawaiian authorities was due to come into force on 1 January 2026 and would have seen an 11% tax on gross cruise ship passenger fares, adjusted for the number of days spent in Hawaiian ports, plus a potential 3% surcharge from counties. It was a proposal made by Governor Josh Green back in May 2025, and would have raised an estimated $100 million annually to help Hawai’i manage the effects of climate change.
The Aloha State entered a period of reckoning with its tourist industry in the wake of devastating wildfires that broke out on Maui in August 2023, killing at least 102 people, destroying more than 2,200 buildings, including historic monuments. Droughts associated with climate change, overdevelopment, the spread of non-native plant species, water management challenges, and winds from Hurricane Dora have all been assessed as factors that contributed to the tragedy.
“We had a $13 billion (€11.5 billion) tragedy in Maui, and we lost 102 people,” Governor Josh Green said, introducing the climate tax, adding: “These kinds of dollars will help us prevent that next disaster.” The funds would have contributed to climate resilience works such as the installation of hurricane protections, the clearance of invasive grasses, and sand replenishment at eroded beaches.
@fundmybadhabit Oahu is on fire💔 #mauifires2023 #mauiwildfires #fyp #hawaiitiktok ♬ this feeling – Øneheart
The cruise sector has argued that the law violates federal US protections for the trade of goods overseas, violating the Constitution and making cruises more expensive, while proponents of the levy point out that cruise ships docking in Hawaiʻi have previously not had to pay the state “transient accommodations tax,” giving them an unfair advantage over land-based hospitality.
For those land-based providers subject to the tax, increased rates on hotel room and vacation rental stays have gone ahead, while, for now, cruise lines have escaped the levy. But government officials are upbeat about the prospect of levelling the playing field and making cruise lines contribute to sustainable tourism, too. “We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits,” Toni Schwartz, spokesperson for the Hawaii attorney general’s office, told the press in an email.
