Cruise Industry Files Lawsuit Against Hawaii Over ...

Key Points:

• The Cruise Traces Worldwide Affiliation is difficult Hawaii’s new tax on cruise ships with a federal lawsuit.
• The lawsuit claims the brand new tax violates the US Structure in addition to the First Modification.
• CLIA just isn’t towards any and all taxes on cruise ships, however solely on how this one is levied and the way unfairly it targets cruise ships in comparison with accommodations.

Hawaii’s plans to lift almost $100 million yearly via a new 11% tax on cruise ships will not be as profitable because the Aloha State had hoped.

The Cruise Traces Worldwide Affiliation (CLIA), together with a number of native plaintiffs, together with two tour corporations that serve cruise ships, has filed go well with towards the state’s new tax, claiming it’s federally unconstitutional.

The lawsuit was filed on Wednesday, August 27, 2025, within the US District Courtroom for the District of Hawai’i. The brand new tax was handed in early Might, however just isn’t scheduled to take impact till January 1, 2026.

As a “inexperienced” tax, the brand new charges wouldn’t go to help cruise operations via port improvement, dredging, or comparable initiatives, however as an alternative can be earmarked for conservation initiatives.

“In making an attempt to leverage Hawai‘i’s ports to lift basic income from out-of-state companies and guests, Act 96 violates federal legislation 3 times over,” the lawsuit alleges.

“Conflicting with the Tonnage Clause of the U.S. Structure, the First Modification’s restriction on government-compelled speech, and a provision of the federal Rivers and Harbors Appropriation Act of 1884 that exists to ban charges precisely like those imposed.”

The Tonnage Clause (Article 1, Section 10, Clause 3) prohibits states from taxing ships for merely coming into the harbor. Taxes could be levied for companies, corresponding to pilots or loading and unloading, and cruise ships repeatedly pay these varieties of taxes.

Equally, the violation of the Rivers and Harbors Appropriation Act of 1884 is expounded to the general quantity of the charges. The Rivers and Harbors Act units statutory limits on charges states could impose for utilizing navigable waters.

Lastly, the First Modification violation is as a result of the brand new Hawaii cruise ship tax requires cruise traces to reveal the tax in commercials and different ads, in addition to onboard each ship visiting Hawaii.

As a result of the tax itself is being challenged, this additional requirement is now in battle with the First Modification.

One other facet of the brand new tax is that particular person counties in Hawai’i’ve the authority to levy their very own extra taxes on cruise ships. These charges could be as much as 3%, along with the 11% payment from the state.

These charges are on cruise fares paid by passengers.

“Between the 11% surcharge levied by the State and the three% state-authorized surcharges levied by the counties, cruise-ship operators might be required to pay an efficient 14% prorated portion of every passenger’s gross fare for the privilege of visiting ports in Hawai‘i,” the lawsuit explains.

That payment is more likely to be handed alongside to cruise visitors, elevating fares considerably for sailings to Hawaii.

Even if the tax is meant to generate income for Hawaii, this might backfire with a lack of revenue if passengers select extra inexpensive cruise locations.

Is the Tax Honest to Cruise Ships?

To be clear, cruise traces usually are not making an attempt to disband all taxes and port charges, however this huge enhance and the way in which it’s worded is especially troublesome.

The lawsuit explains that as a result of the 11-14% surcharge is on the whole cruise fare, “somewhat than simply that portion of the fare attributable to on-board lodging,” it isn’t similar to vacationer charges levied on accommodations and resorts.

Learn Additionally: Honolulu Cruise Port – Piers, Amenities, and Getting Around

In spite of everything, a cruise fare contains way over a lodge room. It additionally contains a number of eating choices, every day actions and leisure, swimming pools and different onboard facilities, in addition to transportation between ports.

The same tax on accommodations particularly excludes expenses for facilities corresponding to meals, drinks. Likewise, flights between islands usually are not taxes, however a cruise fare contains port to port transportation.

“In consequence, cruise-ship operators and (by extension) their passengers might be compelled to make funds considerably greater than these required in reference to different varieties of tourism-related companies,” the lawsuit clarifies.

It is going to probably be at the very least a number of months earlier than the lawsuit is determined. Within the meantime, it’s unclear whether or not or not visitors booked on Hawaii cruises in early 2026 must be ready for added taxes or charges. It’s potential the charges could also be suspended till the lawsuit is settled.

Cruise Industry Files Lawsuit Against Hawaii Over Ship Tax

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