Appeals Court Blocks Hawaii Cruise Passenger Tax 2026

A federal appeals court has temporarily blocked Hawaii from enforcing the cruise ship passenger tax portion of the state's climate focused "Green Fee" law, changing the near term pricing assumptions for 2026 Hawaii cruise itineraries. The shift matters most for passengers who expected the new cruise fare levy to appear as a distinct tax line item, and for travel advisors and cruise lines that already built the charge into quotes. For now, travelers should pull their most current invoice, look for any Hawaii specific tax or port charge adjustments, and expect some sailings to be repriced or reissued while the case moves through an expedited appeal schedule.

The blocked portion is the cruise ship application of Hawaii's transient accommodations tax framework, which the state designed to apply to cruise fares based on the share of voyage days spent docked in Hawaii ports. In late December, a federal district judge in Honolulu declined to halt enforcement ahead of the planned January 1, 2026 start, but the appeals court action on December 31, 2025 has now paused that cruise enforcement while the appeal proceeds.

Who Is Affected

Passengers on 2026 cruises that call at Hawaii ports are the primary group affected, especially those on itineraries with multiple island port days where a prorated formula can materially change the total tax amount. Travelers who booked early, locked in a tight budget, or are comparing similar sailings across lines should treat this as an invoice volatility event, not a permanent repeal, because the underlying legal fight is still active.

Cruise lines, travel agencies, and distribution systems are also affected because a tax that was expected to be collected and remitted in 2026 now sits in limbo. That operational uncertainty can show up as mismatched price displays across channels, new disclaimers in booking flows, and last minute adjustments at final payment when back office tax engines are updated. Shore side operators, including tour sellers and port day vendors, can feel second order effects when travelers reforecast their trip spend, or shift purchases onboard if they believe taxes will swing again.

Importantly, this injunction is about the cruise ship portion of the law, not a universal freeze on Hawaii visitor taxes. If your cruise plan includes pre or post nights on land, do not assume your hotel or short term rental bill follows the same pause logic, because the lodging side of Act 96 is a different exposure and may still raise 2026 land stay costs.

For earlier context on how the charge was expected to appear on cruise invoices before the appeals court pause, see Hawaii 11% Cruise Tax Starts Jan 1 After Court Ruling. For a practical comparison of how another cruise passenger levy tends to be bundled into port taxes, see Mexico Cruise Tourist Tax Begins: What to Know.

What Travelers Should Do

Start by treating your invoice as a living document until the appeal stabilizes. Pull your cruise confirmation and the latest statement, then look for any Hawaii specific tax, transient accommodations tax language, or port taxes and fees changes compared with earlier versions. If your sailing departs in early 2026 and final payment is near, ask the cruise line or your advisor whether they are removing the charge now, holding it as estimated, or waiting for additional guidance before reissuing documents.

Next, set decision thresholds that match your budget reality rather than the headline. If a potential reinstatement would break your budget, the cleanest hedge is to compare itineraries with fewer Hawaii port days, different timing, or a different region, and to prioritize fare types with clearer tax adjustment rules and cancellation flexibility. If you can absorb the swing, it is often better to avoid churn, keep your air and hotel plans intact, and simply plan for a possible add back at a later billing step.

Over the next 24 to 72 hours, monitor three signals that actually change outcomes. Watch for a cruise line policy note or reissued invoice in your email portal, watch your booking's port taxes and fees total for silent updates, and watch the appeal's expedited schedule, which shows opening briefs due January 21, 2026, and answering briefs due February 18, 2026, as a rough indicator of when the next major legal milestone could land.

Background

Hawaii's transient accommodations tax is a state levy designed for short term lodging, and Act 96 of 2025 expanded how the framework applies by bringing cruise ships into the same general scheme used for hotels and vacation rentals. For cruise itineraries, the law aimed to apply the tax to cruise fare value associated with Hawaii port days, rather than treating a ship like a fixed hotel on land, which is why the formula and invoicing presentation have been a focal point for both compliance teams and travelers.

The legal dispute matters to travel because tax design does not stay on paper. At the source, cruise lines must update pricing, disclosures, and settlement workflows, and those updates ripple into how fares are displayed across direct channels, agencies, and metasearch partners. Next, itinerary economics can shift at the margin, because a schedule with more Hawaii port days carries a different cost profile than a route that minimizes time in port, which can influence deployment decisions, port day length, and how aggressively shore excursions are marketed. Downstream, travelers change pre and post cruise behavior, which affects hotel demand near cruise terminals, interisland flight loads when guests add land touring, and even car rental and transfer timing when reissued cruise schedules or changed port calls force itinerary reshuffles.

Procedurally, the case is now in the U.S. Court of Appeals for the Ninth Circuit, and the court has set an expedited preliminary injunction briefing schedule. That matters because an expedited schedule is often the clearest public clue that additional court action could arrive on a faster timeline than a standard appeal, even though the exact decision date is not published in advance.

Sources

• Federal ruling blocks Hawaii's climate change tourist tax on cruise ships
• Federal judge upholds Hawaii's new climate change tax on cruise passengers
• Opinion
• COURT DECISION ALLOWS ACT 96 GREEN FEE TO TAKE FULL EFFECT ON JANUARY 1
• Cruise Lines International Association, Inc., et al. v. Suganuma, et al.