A federal appeals court blocked Hawaii's cruise tax the day before it was set to take effect, a win for the cruise lines. CLIA, the cruise lines' trade group, had sued the state of Hawaii in August over the new legislation.
The Dec. 31 order in the U.S. Court of Appeals for the Ninth Circuit was issued within hours of the 11% tax becoming effective in the new year. It followed a Dec. 23 decision by U.S. District Court Judge Jill Otake that had cleared the way for the tax to start Jan. 1.
The appeals court has not yet reached a final decision on the lawsuit. The order blocking the tax remains in effect until it does so, and the process is being expedited.
The legislation introducing the cruise tax was an expansion of Hawaii's Transient Accommodation Tax, and revenue from the cruise lines was to be earmarked for environmental resilience and sustainability initiatives.
CLIA's lawsuit argues that the tax violates the Constitution and federal law related to taxation on ships. The federal government had joined the lawsuit on CLIA's behalf in November, arguing that the tax "preys upon American businesses and tourists."
Hawaii Gov. Josh Green had said that "visitors who benefit from our island's resources have a shared responsibility to help preserve them."