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Hawaii’s Cruise Tax: What the Court Rulings Mean for Norwegian and Royal Caribbean Passengers

Hawaii’s 11% cruise-fare tax is prorated by Hawaii port days, not a flat fare surcharge. A Ninth Circuit injunction led the state to suspend cruise-fare reporting and remittance pending further notice.
From TheFinanceBase Team3 min to read
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Hawaii’s cruise-fare tax is not currently being enforced under the latest state guidance in the available record. Although a federal district court rejected requests to block the law on December 23, 2025, the Ninth Circuit enjoined enforcement of its cruise-ship provisions on December 31, and Hawaii’s Department of Taxation told taxpayers on January 2, 2026, not to report or remit tax on cruise fares until further notice. The record does not verify the specific Norwegian Cruise Line warning or establish that Royal Caribbean made no statement.

What is Hawaii’s cruise tax?

Hawaii Act 96 of 2025 extended the state’s transient accommodations tax (TAT) to cruise operators’ gross proceeds from fares. The law set an 11% rate for those proceeds, but did not apply it as a flat 11% surcharge on every passenger’s entire fare. Instead, the operator’s fare proceeds are prorated using the share of the voyage spent docked at Hawaii ports: Hawaii port days divided by total voyage days. The Department of Taxation also noted that accounting method and income-recognition timing can affect tax treatment. Hawaii Department of Taxation, Announcement No. 2025-03, June 9, 2025

The tax is part of a broader TAT change. Hawaii raised the general rate for transient accommodations from 10.25% to 11%, effective January 1, 2026. That applies separately from the cruise-specific provisions; the state said the general increase remained in effect while enforcement of the cruise provisions was enjoined. Hawaii Department of Taxation, Announcement No. 2026-01, January 2, 2026

Did a court uphold the tax?

Not as a final ruling on the law’s merits. The phrase “upheld in court” refers to an initial district court decision, not the latest enforcement status or a final appellate judgment.

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Date and action What it meant
December 23, 2025: U.S. District Court for the District of Hawaii The court denied preliminary-injunction requests by private plaintiffs and the United States, and granted the state’s motion to dismiss in part while denying it in part. The decision initially left the scheduled January 1 start on course. District court order, December 23, 2025
December 31, 2025: Ninth Circuit The appeals court enjoined enforcement of Act 96’s provisions as applied to cruise ships pending appeal.
January 2, 2026: Hawaii Department of Taxation The department said the state would refrain from enforcing the cruise-ship provisions until further notice and instructed taxpayers not to report or remit TAT on cruise fares. It said the general increase for transient accommodations remained effective. Department of Taxation Announcement No. 2026-01

The January 2 guidance also says the Ninth Circuit clarified its injunction that day. The injunction is an interim measure during the appeal; it should not be described as a final decision that the tax is lawful or unlawful.

Do passengers have to pay it now?

Under the Department of Taxation’s January 2, 2026 guidance, taxpayers were told not to report or remit TAT on cruise fares while the injunction remained in force. The available guidance does not verify a separate passenger charge, a particular cruise line’s billing practice, or a later change in the injunction’s status. For a current booking or sailing, check the cruise line’s own written fare terms and Hawaii’s latest tax guidance rather than treating the 11% statutory rate as an automatic passenger surcharge.

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What did Norwegian Cruise Line warn passengers about?

The reviewed official court and state tax documents do not include the specific Norwegian Cruise Line passenger warning. They therefore do not establish its wording, date, which itineraries it covered, or whether it described a definite additional charge. Without the original notice or a company statement, it would be misleading to present a particular warning or percentage as confirmed.

Has Royal Caribbean stayed silent?

The available sources do not establish that Royal Caribbean made no statement. A company’s silence is difficult to verify without a defined time period and a documented effort to obtain its response. The lack of a Royal Caribbean comment in the cited court and state documents does not show that the company remained silent to passengers or the press.

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Why was the cruise tax challenged?

Act 96 extended tax, registration, and notification requirements to cruise ships docking at Hawaii ports. Challengers argued, among other things, that the cruise-ship tax functioned like a charge on entering state ports and conflicted with the federal Tonnage Clause and the Rivers and Harbors Appropriation Act. The district court order also records a First Amendment challenge to the notification requirements. These were arguments in the litigation, not findings that the tax had been finally invalidated. District court order, December 23, 2025

The state presented the Green Fee as a way for visitors and cruise operators to contribute to protecting Hawaii’s natural resources and addressing climate-related threats. Governor Josh Green said visitors who benefit from the islands’ resources have a shared responsibility to help preserve them. Governor of Hawaii, December 23, 2025

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  • Fit Your Future Cruise: SEAVILIA's latest cruise luggage tag holders are the ideal accessory for your upcoming voyages with major cruise lines like Norwegian, Princess, Carnival, Royal Caribbean & Celebrity, among others
  • Versatile Options: Available in two practical sizes (3.63 x 7.72 /2.52 x 7.56 inches) to suit your needs, with multiple units in stock for family travel convenience
  • Easy to Use: It's a hassle-free way to prepare for your cruise; Simply print your paper tag, fold it, and slide it into the clear plastic holder; Then securely attach it to your luggage handle - no tools needed
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