The state’s Green Fee on hotels and cruise ships to pay for climate resilience projects will go into effect in the new year. A court ruling largely dismissed a lawsuit by the cruise ship industry challenging the policy.
The Green Fee increases the state’s visitor tax by 0.75 percentage points to fund climate resiliency and sustainable tourism projects.
It also levies the tax on cruise ships docking in Hawaiʻi, which previously did not have to pay the state transient accommodations tax, now at 11%.
The cruise industry, represented by the Cruise Lines International Association, sued the state in an attempt to block the tax. It alleged that the law violates federal protections for the trade of goods overseas.
Federal Judge Jill Otake wrote in her opinion that if the law was blocked, it would give preferential treatment to the cruise industry over land-based accommodations like hotels.
But she added that because the federal laws that provide the protections for maritime commerce are not litigated often, other courts may come to a different conclusion about the legality of the state’s Green Fee in the future.
The Green Fee is expected to bring in about $100 million a year to the state. The revenue was included in Gov. Josh Green’s recent budget proposal to the Legislature.
In addition to the state transient accommodations tax, counties levy their own 3% TAT. Accommodations are also charged the state's 4% general excise tax, plus a county surcharge.
In total, after the Green Fee goes into effect on Jan. 1, visitors will face a tax on their hotel or vacation rental of over 18%.
