Hawaii’s new climate change tax on cruise ships has been blocked by the federal court

• Hawaii is looking to impose a new climate change tax on cruise ships.
• The new tax would apply to all passengers on cruises to Hawaii, which the state claims it would put towards conservation projects.
• The Cruise Lines International Association is suing the State of Hawaii due to this tax, and a US federal court has temporarily blocked the rule from being enacted.

An American federal appeals court has temporarily blocked Hawaii from enforcing a new climate change tax on cruise ship passengers that was due to start in 2026.

The ruling was issued on New Year’s Eve by two judges on the 9th U.S. Circuit Court of Appeals, prevents the state from enforcing the tax while the legal challenges proceed.

The Cruise Lines International Association brought forward the lawsuit, arguing the new fee violates the U.S. Constitution and would increase cruise prices.

The new tax would mean an 11 per cent tax on top of gross cruise fares paid by cruise ship passengers, prorated for the number of days that passengers are in Hawaii ports. For example, on a $2000 cruise, that spends three days in Hawaii, guests would be charged $66 extra in taxes.

The new tax was estimated to bring in about USD$100 million each year, which the government says would be put towards conservation projects.

There isn’t a confirmed timeline on when final rulings will be made, but a spokesperson for the Hawaii attorney general’s office told AP that they remain confident it will pass.

“We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits.”

This process, regardless of the outcome, demonstrates how that for US towns and states, cruises like these ones cannot be implemented without significant challenges. As cruise lines struggle with new taxes and regulations in Europe and beyond, they’re likely to double down on efforts to ensure that local towns and states don’t follow suite.

In other areas of America as well as Europe, towns and cities have begun to impose additional taxes on cruise passengers.

Recently, the Alaskan town of Juneau has increased port fees and is looking to introduce a new seasonal sales tax structure, which would charge passengers an additional two per cent on goods and services.