Cruise & Cruise Line

Cruise Lines Sue Hawaii Over Out-of-State Passenger Tax

Image: Holland America's Noordam ship in Lahaina, Hawaii. (Photo Credit: Holland America Line)
Image: Holland America's Noordam ship in Lahaina, Hawaii. (Photo Credit: Holland America Line)
Donald Wood
by Donald Wood
Last updated: 8:15 AM ET, Fri August 29, 2025

A group of cruise operators has filed a federal lawsuit against the state of Hawaii over a new law that taxes cruise ships, similar to the one imposed on hotel operators.

According to Hawaii News Now, the Cruise Lines International Association (CLIA) said as part of its lawsuit that the Hawaiian government violated the United States Constitution when it passed an 11 percent tax on out-of-state cruise passengers in January.

The tax on cruise lines is similar to the transient accommodations tax levied against hotel and vacation rental guests.

“Here you have a floating hotel, right? You have a floating hotel,” Hawaiian Senate Economic Development and Tourism Committee chairperson Sen. Lynn DeCoite said. “The hotel industry has paid their fair sure for the past years.”

The CLIA’s lawsuit claims the “Supreme Court long has recognized, the Constitution’s Tonnage Clause bars States from imposing any charge for the privilege of entering, trading in, or lying in a port.”

In addition, the lawsuit stated that an average family would incur hundreds of dollars in extra costs for a cruise to Hawaii, potentially causing travelers to “forego trips to Hawaii in favor of other destinations.”

Data shows that more than 150,000 out-of-state cruise line passengers came to Hawaii last year.


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Donald Wood

Donald Wood

Managing Editor

Donald Wood is TravelPulse’s Managing Editor, bringing nearly 15 years of experience to the desk. He currently lives outside Philadelphia with his wife and two children.

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