Cruise industry group sues to challenge Hawaii’s tourism tax
HONOLULU (AP) — A lawsuit challenging the constitutionality of Hawaii imposing a tourist tax to deal with consequences of climate change seeks to stop officials from enforcing the new law on cruise ship passengers.
In the nation’s first such levy to help cope with a warming planet, Hawaii Gov. Josh Green signed legislation in May that raises tax revenue to deal with eroding shorelines, wildfires and other climate problems. Officials estimate the tax will generate nearly $100 million annually.
The levy increases rates on hotel room and vacation rental stays but also imposes a new 11% tax on the gross fares paid by a cruise ship’s passengers, starting next year, prorated for the number of days the vessels are in Hawaii ports. The lawsuit, filed in U.S. court in Honolulu this week, notes the law authorizes counties to collect an additional 3% surcharge, bringing the total to 14% of prorated fares.
“No other State imposes comparable fees — and for good reason: It has been a fundamental principle since the Founding that the navigable waters of the United States are a common resource, not one to be commandeered by individual States for their own parochial revenue-raising interests,” attorneys representing the Cruise Lines International Association wrote in a motion asking a judge to prevent the state and counties from collecting the tax on cruise ships while the lawsuit is pending.
A Honolulu company that provides supplies and provisions to cruise ships, and tour businesses out of Kauai and the Big Island that rely on cruise ship passengers joined the cruise ship association in the lawsuit.
The defendants are various state tax and county finance officials.
The Hawaii attorney general’s office declined to comment Friday on the lawsuit until it had been reviewed.