HONOLULU (AP) — A lawsuit challenging the constitutionality of Hawaii imposing a tourist tax to deal with consequences of climate change seeks to stop officials from enforcing the new law on cruise ship passengers.
In the nation's first such levy to help cope with a warming planet, Hawaii Gov. Josh Green signed legislation in May that raises tax revenue to deal with eroding shorelines, wildfires and other climate problems. Officials estimate the tax will generate nearly $100 million annually.
The levy increases rates on hotel room and vacation rental stays but also imposes a new 11% tax on the gross fares paid by a cruise ship's passengers, starting next year, prorated for the number of days the vessels are in Hawaii ports. The lawsuit, filed in U.S. court in Honolulu this week, notes the law authorizes counties to collect an additional 3% surcharge, bringing the total to 14% of prorated fares.
“No other State imposes comparable fees — and for good reason: It has been a fundamental principle since the Founding that the navigable waters of the United States are a common resource, not one to be commandeered by individual States for their own parochial revenue-raising interests," attorneys representing the Cruise Lines International Association wrote in a motion asking a judge to prevent the state and counties from collecting the tax on cruise ships while the lawsuit is pending.
A Honolulu company that provides supplies and provisions to cruise ships, and tour businesses out of Kauai and Big Island that rely on cruise ship passengers joined the cruise ship association in the lawsuit.
The defendants are various state tax and county finance officials.
The Hawaii attorney general's office declined to comment Friday on the lawsuit until it had been reviewed.
Hawaii County spokesperson Tom Callis said they don't comment on pending litigation. County representatives on Oahu, Maui and Kauai didn't immediately respond to an email seeking comment.
According to the lawsuit, the cruise ship industry draws nearly 300,000 annual visitors to Hawaii, supporting thousands of jobs throughout the state and contributing more than $600 million a year to the economy.
The tax would make Hawaii cruises too expensive, and potential visitors will choose to vacation elsewhere, the lawsuit said.
The plaintiffs, in a motion seeking a preliminary injunction to declare the law's cruise-related provisions unconstitutional and bar its enforcement, urges a judge to act swiftly because cruise-ship passengers typically make travel plans well in advance.
The impending surcharge “will begin to skew the market even before they take effect,” causing families who would have purchased Hawaii cruise tickets in 2026 to make other vacation plans, the motion said.
The new law adds 0.75% to the existing 10.25% tax on daily hotel and vacation room stays for a 11% total. Hawaii’s counties each add their own 3% surcharge, and the state and counties impose a combined 4.712% general excise tax on goods and services including hotel rooms. Together, that will make for a hotel and vacation rental tax rate of nearly 19%.
Jennifer Sinco Kelleher, The Associated Press
