Hawaii's Climate Tax: What It Actually Does
Act 96, the law everyone's been arguing about, extends Hawaii's Transient Accommodations Tax to cruise fares at an effective 11 percent rate. But it's not a flat fee on your entire cruise. The state calculates the taxable portion by looking at how many days your ship spends docked in Hawaiian ports versus the total length of your voyage. So if you're on a 10-day cruise and spend three days in Hawaii, you're taxed on 30 percent of your fare; at 11 percent. Counties can pile on, too. They're allowed to add up to an additional 3 percent surcharge on top of that prorated cruise fare, potentially pushing the total to 14 percent on the Hawaii portion of your ticket. That's not pocket change, especially when you're talking about multi-thousand-dollar bookings. The idea, according to state officials, is to raise nearly $100 million annually to help Hawaii cope with the very real, very expensive impacts of climate change: eroding beaches, wildfire risk, coral bleaching, you name it. "As an island state, we face unique challenges," Governor Green has said, pitching the tax as a responsible way to make visitors contribute to the environmental upkeep of the place they're coming to enjoy.Why the Tax Isn't Being Collected (Yet)
U.S. District Judge Jill A. Otake initially gave the tax a green light, denying a request from cruise interests to block it before the January 1 start date. For a brief moment, it looked like Hawaii would begin collecting the levy right on schedule. Then, on December 31, the Ninth U.S. Circuit Court of Appeals hit pause. The court granted injunctions requested by the Cruise Lines International Association and the U.S. Department of Justice, effectively freezing enforcement of Act 96 on cruise ships while the legal fight plays out. So as of now, if you're sailing to Hawaii, you're not paying the climate tax; at least not the cruise-specific piece of it. "We remain confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits," said Toni Schwartz, spokesperson for the Hawaii attorney general's office. The cruise industry begs to differ.The Cruise Industry Pushes Back
Cruise Lines International Association has been vocal in its opposition, arguing that the tax is unconstitutional under federal maritime and commerce law. Their position is straightforward: singling out cruise passengers for a higher tax than land-based tourists amounts to an unlawful burden on interstate and international commerce. "Cruise tourism generates nearly $1 billion in total economic impact for Hawaii and supports thousands of local jobs, and we remain focused on ensuring that success continues on a lawful, sustainable foundation," said Jim McCarthy, spokesperson for the association. There's an economic argument layered in here, too. The cruise industry warns that an 11 percent tax (or 14 percent, if counties max out their surcharge) will drive up cruise prices and potentially dampen demand. That could mean fewer ships calling at Hawaiian ports, fewer shore excursions booked, and less money flowing into the very communities the tax is supposed to help protect. It's a classic tension: how do you make tourism pay for the damage it causes without killing the golden goose?What This Means for Travelers
If you're booking a cruise to Hawaii right now, don't expect to see the climate tax on your invoice. The injunction means cruise lines aren't collecting it, and there's no telling how long the legal limbo will last. Appeals can drag on for months, sometimes years. If you're staying in a hotel or short-term rental, the existing 10.25 percent Transient Accommodations Tax still applies, and depending on your county, there may be additional local levies. Act 96's changes to land-based accommodations are less dramatic and haven't faced the same legal roadblocks, but it's worth double-checking your booking confirmation to see exactly what's being charged. The bigger question is what happens if Hawaii wins its appeal. If the Ninth Circuit upholds the tax, it could open the door for other coastal states dealing with climate pressures to follow suit. Imagine California or Florida adopting similar levies to fund coastal restoration or wildfire mitigation. Hawaii's experiment, if it survives, could become a blueprint.A Climate Tax in Uncharted Waters
Hawaii has long walked a tightrope between welcoming millions of visitors a year and managing the environmental toll that tourism takes on its fragile ecosystems. This tax is an attempt to make that relationship more sustainable, literally. But as the legal injunction shows, there's no easy path forward when you're trying to balance constitutional law, economic realities, and the escalating costs of a warming planet. For now, the climate tax is on hold. But the conversation it's started; about who pays for climate resilience, how much, and whether tourists should foot the bill; is just getting started.About the Author
Bob Vidra
Bob Vidra, based in scenic Tahoe, is an esteemed tech editor known for his deep understanding of the dynamic intersection of technology, travel, and the outdoors.