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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.
Cruise Lines International Association challenged the tax in a
lawsuit, along with a Honolulu company that provides supplies
and provisions to cruise ships and tour businesses out of Kauai
and the Big Island that rely on cruise ship passengers. Among
their arguments is that the new law violates the Constitution by
taxing cruise ships for the privilege of entering Hawaii ports.
Plaintiff lawyers also argued that the tax would hurt tourism by
making cruises more expensive. The lawsuit notes the law
authorizes counties to collect an additional 3% surcharge,
bringing the total to 14% of prorated fares.
“Cruise tourism generates nearly $1 billion in total economic
impact for Hawai‘i and supports thousands of local jobs, and we
remain focused on ensuring that success continues on a lawful,
sustainable foundation,” association spokesperson Jim McCarthy
said in a statement.
According to court records, plaintiffs will appeal.
Hawaii will continue to defend the law, which requires cruise
operators to pay their share of transient accommodation tax to
address climate change threats to the state, state Attorney
General Anne Lopez said in a statement.
The U.S. government intervened in the case, calling the tax a
“scheme to extort American citizens and businesses solely to
benefit Hawaii” in conflict with federal law.
Plaintiff and Department of Justice attorneys filed motions
Wednesday seeking to maintain the status quo pending appeal.
Otake denied the motions.
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