Cruise Lines Challenge Hawaii’s ‘Green Fee’ as Unconstitutional

Bloomberg Law Aug 28, 2025 (excerpt)

 … Hawaii’s “Green Fee”—a surcharge imposed on cruise lines to fund green projects in the state—is unconstitutional, according to a new federal lawsuit from groups representing the companies.

The 11% surcharge violates the US Constitution’s Tonnage Clause, which prohibits states from imposing taxes on vessels for entering and docking at ports, the groups told the US District Court for the District of Hawaii Wednesday.

Hawaii also unconstitutionally allows its counties to levy their own 3% surcharge over and above what the state charges, prorated depending on the length of the vessels’ stay, the complaint said….

read … Cruise Lines Challenge Hawaii’s ‘Green Fee’ as Unconstitutional

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CLIA News Release Aug 28, 2025:

The cruise industry, together with local businesses reliant on its economic contributions, opposes the extension of Hawaii’s Transient Accommodations Tax (TAT) to cruise ship passengers. We believe the extension violates both the U.S. Constitution and federal law, while imposing an additional financial burden on passengers already subject to substantial fees and taxes.

Such a policy risks undermining a critical sector of Hawaii’s economy without justification. That’s why we are pursuing all appropriate means to make sure that doesn’t happen, including filing suit yesterday in the United States District Court for the District of Hawaii.

The economic significance of cruise tourism to Hawaii is undeniable. Small businesses reap significant benefits from cruise tourism and cruise line shoreside activities, which generated $639 million in total economic impact, including $116 million in tax revenues, and supported 3,000 local jobs and $215 million in wages in 2023, according to an analysis by Tourism Economics / Oxford Economics.

These figures reflect a vibrant partnership that sustains communities across the islands. Extending the TAT to cruise passengers threatens to deter visitors whose spending fuels this economic engine, risking job losses and eroding the financial stability of businesses dependent on tourism.

The cruise industry values its longstanding relationship with Hawaii and is committed to working collaboratively with state officials to develop a fair and legally sound framework that promotes sustainable economic growth.

We urge policymakers to reconsider this proposal, which could disproportionately harm the very communities that rely on cruise tourism’s contributions. A balanced approach, grounded in mutual cooperation, will better serve Hawaii’s economic interests and preserve the livelihoods of its residents.

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PDF: COMPLAINT

PDF: Motion for Preliminary Injunction

Precedent: Cruise Line Suit Defeated Alaska’s version of Green Fee

MI: … This lawsuit marks only the second time CLIA has sued a state in the U.S. The first was in 2016, when the group challenged cruise passenger head taxes in Juneau, Alaska. That case also centered on the tonnage clause, and in 2018, a federal court sided with the industry, ruling that fees must directly fund services provided to vessels. The dispute ended with a settlement in 2019 ….

read … Cruise Lines Sue Hawaii Over First-of-Its-Kind ‘Green Fee’ On Passengers

May 2025: Lawyer Outlines Cruise Industry Case Against Green Fee

L360: Hawaii Transient Tax Is Unconstitutional, Cruise Cos. Say - Law360 Tax Authority

CN: Cruise ship fees | Courthouse News Service

TW: The cruise lines sue Hawaii over new tax: Travel Weekly

TMR: CLIA Sues State of Hawaii Over Cruise Tax

TTW: CLIA Sues Hawaii Over New ‘Unconstitutional Green Tax’ on Cruise Ships, Threatening US Tourism Economy - Travel And Tour World

CH: Cruise Industry Files Lawsuit Against Hawaii Over Ship Tax

SC: Cruise industry sues Hawaii over passenger tax

USAT: Cruise industry sues Hawaii over first-of-its-kind 'Green Fee'

YN: Cruise industry sues Hawaii over hefty new cruise tax

CB: Cruise Ship Industry Sues To Scuttle Hawaiʻi's New Visitor Green Fee - Honolulu Civil Beat

AP: Cruise industry group sues to challenge Hawaii's tourism tax designed to deal with climate change

ME: Cruise Industry Sues Hawaii Saying “Green Fee” is Unconstitutional