Cruise passengers sailing to Hawaii won’t see a new climate-related tax on their fares, at least for now.

On New Year’s Eve, a two-judge panel from the 9^th US Circuit Court of Appeals blocked Hawaii from enforcing a new tax on cruise ship passengers that was scheduled to begin January 1, 2026.

The decision grants an injunction while the case works its way through the appeals process, temporarily stopping the state from collecting the tax from cruise lines and their guests.

“Accordingly, and until further notice, the Department of Taxation will refrain from enforcing Act 96 as it relates and applies to cruise ships,” said Gary S. Suganuma, director of taxation for the State of Hawaii. 

The challenge was brought by Cruise Lines International Association (CLIA), which sued the state, arguing the new tax, Act 96, violates the US Constitution by effectively charging cruise ships for entering Hawaii ports. Cruise Lines, including Norwegian Cruise Line, had already started informing booked guests of the new fee.

CLIA also argued that the “green fee” would raise cruise fares for passengers sailing to the islands.

Hawaii’s proposed tax is part of a broader law aimed at generating new revenue across the island state to address climate-related issues. While most of the law focuses on increasing taxes on hotel rooms and vacation rentals, it also introduced a new charge on cruise passengers.

Read Also: Honolulu Cruise Port – Piers, Amenities and Getting Around

The law would impose an 11 percent tax on gross fares paid by cruise ship passengers, prorated based on the number of days a vessel spends in Hawaiian ports.

It also allows counties in Hawaii to add an additional surcharge of up to 3 percent, potentially bringing the total tax to 14 percent of prorated cruise fares.

While the December 31, 2025, ruling pauses the enforcement of the cruise-related portion of the law, Hawaiian officials note the injunction is just temporary.

In a statement to local news outlets, Toni Schwartz, a spokesperson for the Hawaiian attorney general’s office, said, “We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits.”

The Green Fee, Explained

Act 96 was first introduced and approved by Hawaii lawmakers in May 2025 as part of a broader plan to raise money for climate-related needs across the state.

Governor Josh Green signed the bill into law with the goal of making visitors help pay for environmental challenges, such as shoreline erosion, wildfire prevention, and damage linked to climate change.

Most of the law focuses on increasing taxes on hotel rooms and vacation rentals, but, for the first time, it also applied a tax to cruise ship passengers.

State officials estimate the law could raise close to $100 million a year once fully implemented.

However, the cruise industry strongly opposed the new tax, with CLIA filing a lawsuit arguing that Hawaii does not have the legal authority to tax cruise fares in this way.

CLIA has also pointed to the economic role cruise tourism plays in Hawaii, saying it brings nearly $1 billion to the state each year while supporting thousands of jobs tied to ports, transportation, tours, and local businesses.

Cruise ships make hundreds of port calls annually across the islands, including stops in Honolulu, Maui, and Kauai.

The group says it will continue challenging the law in court while still working with Hawaii officials on tourism and sustainability issues.

Although a federal district judge initially upheld Act 96 on December 23, 2025, the 9^th US Circuit Court of Appeals stepped in on December 31, blocking enforcement while the appeals process continues.

Cruisers Expected a New Hawaii Fee Until a Court Ruling Changed the Plan