The cruise lines' trade group, the Cruise Lines International Association, has sued the state of Hawaii, claiming a new 11% tax on cruise ships violates the U.S. Constitution and federal law.
CLIA's lawsuit alleges that the tax will cost cruise lines hundreds of millions of dollars in surcharges over the next decade "and cause many potential visitors to vacation elsewhere." It argues that the tax violates the Constitution's Tonnage Clause and the Rivers and Harbors Appropriation Act of 1884.
CLIA argues that Hawaii has twice violated the Tonnage Clause of the U.S Constitution, which prevents states from taxing harbor access. The Hawaii tax illegally requires a registration fee to dock in Hawaii and taxes cruise ship port days, the lawsuit states.
The Rivers and Harbors Appropriation Act of 1884 prevents nonfederal interests from taxing vessels, CLIA said.
The tax is an expansion of Hawaii's Transient Accommodations Tax, for the first time including cruise ships in addition to tourist accommodations on land. The Hawaii legislature passed the law in May, and it takes effect Jan. 1.
"Such a policy risks undermining a critical sector of Hawaii's economy without justification," CLIA said in a statement. "That's why we are pursuing all appropriate means to make sure that doesn't happen, including filing suit in the United States District Court for the District of Hawaii."
The lawsuit also claims that Hawaii is violating the First Amendment right to freedom of speech by requiring cruise operators to display their registration and reference that registration in advertisements.
In addition to CLIA, the lawsuit lists three other plaintiffs identified as Hawaii-based businesses that depend on the cruise industry: Honolulu Ship Supply Co., Kauai Kilohana Partners and Aloha Anuenue Tours. The latter two offer tours for cruise passengers. Honolulu Ship Supply Co. services vessels, including cruise ships.