The cruise industry and the State of Hawaii? are heading into a courtroom showdown.
This summer, Governor Josh Green signed into law a first-of-its-kind visitor “green fee” that extends Hawaii’s transient accommodations tax (TAT) into cruise ship cabins. This would mean big increases for taxes for cruise visitors to Hawaii.
Cruise Lines International Association (CLIA), the trade group representing the world’s major cruise companies, is suing to block the new law before it takes effect.
What Is Hawaii’s Green Fee?
- Beginning in 2026, cruise passengers would pay the same visitor tax as hotel and short-term rental guests.
- The state’s current transient accommodations tax is 11%, with counties allowed to add up to 3%. That means a cruise passenger could see a total tax of around 14% applied to the portion of their fare tied to days spent in Hawaii ports.
- For land-based travelers, the tax already amounts to about 18–19% when county surcharges and the general excise tax are factored in.
- Governor Green’s office estimates the new “green fee” could raise $100 million annually for conservation, climate resilience, and infrastructure projects. A Green Fee Advisory Council has been created to decide how the funds will be spent.
Why Are Cruise Lines Suing?
CLIA and its partners — including provisioning suppliers and tour operators serving cruise passengers — filed suit in Honolulu federal court. Their arguments include:
- Constitutional claims: The law allegedly violates the U.S. Constitution’s Tonnage Clause, which bars states from imposing charges simply for entering or staying in a port. They also cite the Rivers and Harbors Appropriation Act, which restricts states from burdening navigation with tolls or fees.
- Economic impact: Cruise lines warn that higher costs may push families to skip Hawai?i itineraries altogether, diverting business to Alaska, Mexico, or the South Pacific. In 2023, cruise activity in Hawai?i generated an estimated $639 million in local economic impact, including $116 million in tax revenues, supporting about 3,000 jobs and $215 million in wages across the islands. CLIA argues those economic gains could be at risk if higher visitor taxes drive cruise lines and passengers away.
- Industry disruption: Cruise lines bring roughly 300,000 visitors a year to Hawai?i. CLIA fears the fee will make cruising to the islands less attractive compared with other destinations.
State leaders argue the new tax simply places cruise passengers on equal footing with hotel and rental guests, who have long paid the visitor tax. Supporters in the hotel industry — once opposed — now back the measure, saying Hawaii cannot afford to delay conservation funding.
The Governor’s office projects these revenues will directly support projects to protect Hawai?i’s fragile environment from the pressures of tourism and climate change.
What Happens Next?
- The case, Cruise Lines International Association, Inc. v. Suganuma, is before federal court in Honolulu.
- A preliminary hearing is scheduled for October 31, 2025, to determine whether enforcement will be delayed while the legal challenge proceeds.
- Until the case is resolved, it’s unclear whether cruise passengers will actually see the new charge on their fares in 2026.
What This Means for Travelers
- If you’re planning a Hawai?i cruise in 2026 or later, expect higher fares if the tax stands.
- Cruise lines may adjust itineraries to spend fewer days in Hawaiian ports, reducing the total taxable portion of the fare.
- If the law is overturned, rates may remain closer to current levels — but Hawai?i could look for other funding sources, potentially still affecting visitor costs in different ways.
Hawai?i’s “green fee” represents a new front in the ongoing debate between tourism-driven economies and environmental sustainability.
For the cruise industry, it’s a question of constitutional rights and competitive costs. For Hawai?i, it’s about securing the resources needed to protect the very landscapes and beaches that draw visitors in the first place.
The court’s decision could set a major precedent for how states tax cruise ships — not just in Hawai?i, but across the U.S.
Alison Meacham is the founder of EverythingMouse Disney Blog. For over 15 years she has shared her love of Disney Parks, Disney Cruises and Universal Orlando. In over 30 years of Disney Travel she has spent countless months in Disney Parks and has sailed on over 45 cruises. A British native and now a United States resident she splits her time between California, Florida and the UK. And spends a serious amount of time sailing the seven seas. She helps over 200,000 people per month follow their Disney travel dreams.