In Honolulu’s federal court, a coalition of cruise line operators, tour enterprises, and provisioning suppliers has raised anchor against Hawaii’s newly enacted “Green Fee” law—an unprecedented measure that extends the Transient Accommodations Tax (TAT) to cruise passengers.
The trade association representing them, Cruise Lines International Association (CLIA), has initiated litigation under the case name Cruise Lines International Association, Inc. v. Suganuma. The plaintiffs argue that the law imposes an unconstitutional burden on vessels entering Hawaiian waters, seeking a preliminary injunction to delay its enforcement.
Under the provisions of the statute—which took effect upon passage in May 2025—cruise passengers will be subject to an 11% tax on gross fares, prorated by days spent docked in Hawaii. Counties may levy an additional 3% surcharge, potentially bringing the total to 14%. For land-based lodgings, the TAT has risen from 10.25% to 11%, plus county levies and general excise tax, culminating in a combined burden nearing 19%.
CLIA’s lawsuit contests that the State’s action runs afoul of the U.S. Constitution’s Tonnage Clause, which forbids states from imposing charges for the privilege of entering, trading in, or dwelling at a port; similarly, it invokes the Rivers and Harbors Act as a federal barrier to encumbering navigation with local levies.
In filing for injunctive relief, the plaintiffs raise concern that families planning Hawaii cruises in 2026 may divert their travel to alternate destinations due to the added cost, thereby disrupting long-established travel timelines.
CLIA further points to the economic stakes at hand, invoking figures generated from cruise tourism across the islands: in 2023, cruise-related activity contributed an estimated $639 million in economic impact, $116 million in tax revenues, and sustained some 3,000 jobs with roughly US$215 million in wages.
At this time, state officials—including prosecuting parties from multiple counties and the Attorney General’s Office—have declined to comment, having only recently been served with the complaint. A hearing has been scheduled for October 31st, 2025.