CLIA sues Hawaii over ‘Green Tax’

Cruise Lines International Association (CLIA), along with several other shipping and tour companies, is suing the state of Hawaii over its “Green Fee.” The so-called “Green Fee” (Act 96) was signed into law in May 2025 and would require visitors to pay a tax that would help support “funding for environmental stewardship, hazard mitigation and sustainable tourism.”

Background on the “Green Fee”

The transient accommodations tax (TAT) has existed for stayover arrivals but will be increased by .75 percent starting in 2026 as a result of the law. Act 96, however, would additionally levy a fee on cruise ships that call in the state for the first time.

“Assessing the TAT on cruise ships — a sector of transient accommodations that has long gone untaxed under the TAT — promotes equity across the tourism industry, ensuring that all visitors to Hawai‘i contribute to the islands’ long-term resilience and well-being,” said the office of Hawaii Governor Josh Green when the bill was passed.

CLIA’s Complaints

According to the lawsuit, the “Green Fee” could total up to 14 percent “on the gross fares paid by a cruise ship’s passengers, prorated by the portion of its voyage spent docked in Hawaii ports.” This would comprise a statewide 11 percent tax and up to 3 percent in surcharges based on the county.

CLIA and the other groups are alleging that this TAT against cruise ships violates two maritime laws as well as the First Amendment. In short:

• The Constitution’s Tonnage Clause bars states from imposing any “charge for the privilege of entering, trading in, or lying in a port.”
• Under the Rivers and Harbors Act, Congress barred states from charging “taxes, tolls, . . . or any other impositions whatever” on vessels “operating on any navigable waters subject to the authority of the United States,” subject to certain narrowly drawn exceptions.
• And, in reported violation of the First Amendment, “Act 96 requires cruise-ship operators to engage in extensive speech about the state’s new fee regime, posting notices about compliance with that regime on every cruise ship and including similar information in every advertisement they run for Hawaii-bound cruises.”

CLIA also noted that cruise ships bring nearly 300,000 unique visitors to Hawaii each year, supporting nearly 3,00 jobs and generating approximately $116 million in state tax revenue.