Hawaii has come under legal scrutiny after the Cruise Lines International Association (CLIA) filed a lawsuit challenging the state’s proposed ‘Green Fee’ bill. The legislation seeks to raise the transient accommodations tax (TAT) for tourists staying at Hawaii hotels to 11%, with an additional 11% tax on cruise passengers. The total tax is estimated to reach 14% when combined with county surcharges, generating projected annual revenues of $100 million to fund climate mitigation initiatives and economic development projects.
CLIA argues that the extension of the TAT to cruise passengers violates constitutional and federal laws, imposing an undue financial burden on tourists and potentially deterring visitors who contribute significantly to Hawaii’s tourism-driven economy. The association emphasizes that the cruise industry is a major economic engine for the state, and the tax could lead to job losses and financial instability for businesses reliant on tourism. The Hawaii Department of the Attorney General confirmed it has received the lawsuit but stated it will not comment until the complaint is fully reviewed.
According to the bill, a portion of the newly raised revenue would be allocated to the Climate Mitigation and Resiliency Special Fund and the Economic Development and Revitalization Special Fund. The funds are intended to address issues such as invasive species, wildlife conservation, beach management, and restoration. Additionally, the bill includes provisions for a green jobs youth corps and support for environmental concerns. The bill was proposed in response to the state’s increasing challenges posed by over-tourism and its impacts on the environment.
In 2023, over 9.6 million visitors traveled to Hawaii, according to the Hawaii Tourism Authority. The ‘green fee’ is projected to generate $100 million annually, according to the release. The lawsuit points out that the state’s counties each add their own 3% surcharge on top of the state’s tax, bringing the total to 14%. The association also highlighted the importance of cruise tourism as a major economic driver, warning that the tax could risk job losses and erode the financial stability of businesses dependent on tourism.