A heated debate is underway in Hawaii as lawmakers push for a new cruise ship tax aimed at leveling the playing field between cruise passengers and hotel guests. The proposal has sparked strong backlash from the cruise industry, which warns that the added costs could lead to fewer ships visiting the islands.
What’s Being Proposed?
Hawaii legislators are advancing bills that would impose new taxes or fees on cruise ship passengers. These include:
- An 11% tax on ship cabins, similar to the Transient Accommodations Tax (TAT) charged to hotel and vacation rental guests.
- A potential per-person passenger fee, designed to generate additional revenue from visitors arriving by sea.
Lawmakers argue that cruise tourists should be taxed the same as other visitors who stay in hotels or rentals.
Cruise Industry Fires Back
The cruise industry, led by Norwegian Cruise Line, strongly opposes the tax hike. In a letter to state officials, attorneys warned that passing such legislation would result in a lawsuit, citing violations of maritime law.
Norwegian Cruise Line Executive VP and General Counsel, Daniel Farkas, emphasized:
“It’s simply unconstitutional… It has to do with uniformity when a vessel pulls into port.”
He also stated that these taxes could add up to $100 per passenger per day, making cruises to Hawaii significantly more expensive. For a family of five, that could mean $500 extra on top of ticket prices.
Current Passenger Fees and Legal Gray Areas
Farkas pointed out that passengers aboard Pride of America, Norwegian’s inter-island ship, already pay about $200 in port fees and excise taxes. Foreign-flagged cruise lines, however, pay less in taxes because they don’t operate as extensively in U.S. waters.
The cruise industry argues that the proposed taxes exceed what is constitutionally allowed—only charges directly related to the cost of services and infrastructure can be levied under maritime law.
Lawmakers Stand Their Ground
House Tourism Committee Chair Rep. Adrian Tam maintains the tax is about fairness:
“All we’re asking for is for them to pay their fair share… They are benefiting from Hawaii’s natural beauty.”
Tam also rejected the idea that cruise lines would abandon Hawaii, calling the proposed tax “affordable” and a necessary step to protect the state’s environment and infrastructure.
What’s Next?
As the legislative session continues, the final form of the Hawaii cruise tax proposal will be negotiated in a conference committee between the House and Senate. The outcome could reshape the future of cruise tourism in Hawaii—either bringing in new revenue for the state or potentially driving ships away from the islands.
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