Hawai’i’s tourist tax to deal with consequences of climate change is under attack by the cruise industry, which says it violates the U.S. constitution. But advocates say the levy forces polluters to pay for the damage their ships leave behind.

Signed in May, the first-of-its-kind legislation increases the state’s lodging tax to raise an expected  US$100 million annually for protecting the environment and bolstering defenses against eroding shorelines and climate-driven disasters like wildfires.

The levy increases rates on hotel room and vacation rental stays but also imposes a new 11% tax on the gross fares paid by a cruise ship’s passengers, starting next year, prorated for the number of days the vessels are in Hawai’i ports. The lawsuit, filed in Honolulu in August, states the law authorizes counties to collect an additional 3% surcharge, bringing the total to 14% of prorated fares.

“No other State imposes comparable fees—and for good reason: It has been a fundamental principle since the Founding that the navigable waters of the United States are a common resource, not one to be commandeered by individual States for their own parochial revenue-raising interests,” attorneys representing the Cruise Lines International Association wrote in a motion, asking a judge to prevent the state and counties from collecting the tax on cruise ships while the lawsuit is pending.

But environmental advocates say cruise travel is not the boon to communities it claims to be.

“Cruise companies have a history of polluting the destinations they go to,” Anna Barford, oceans campaigner for Stand.earth, told The Energy Mix. The group’s research in Victoria, British Columbia, finds [pdf] that cruise travellers spend less money, create fewer jobs, and provide much less government revenue to communities than other kinds of tourism.

Cruise tourism also brings with it significant pollution and environmental damages, Barford said. Taxes like the one imposed by Hawai’i shifts some of the costs of those impacts from communities to the polluters by forcing big companies to stop leaving destinations in worse conditions.

“When they are well designed, taxes help make sure that communities are not left with empty purses when they are forced to deal with the pollution and the damages caused by climate change,” Barford said.

A Honolulu company that provides supplies to cruise ships and tour businesses in Kauai and the Big Island joined the cruise ship association in the lawsuit. The defendants are various state tax and county finance officials.

According to the lawsuit, the cruise ship industry draws nearly 300,000 annual visitors to Hawai’i, supporting thousands of jobs throughout the state and contributing more than $600 million a year to the economy.

The tax would make Hawai’i cruises too expensive, and potential visitors will choose to vacation elsewhere, the lawsuit said.

Seeking a preliminary injunction to declare the law’s cruise-related provisions unconstitutional and bar its enforcement, the plaintiffs urge a judge to act swiftly because cruise passengers typically make travel plans well in advance. A hearing is scheduled for Oct. 31.

The impending surcharge “will begin to skew the market even before they take effect,” causing families who would have purchased Hawai’i cruise tickets in 2026 to make other vacation plans, the motion said.

The new law adds 0.75% to the existing 10.25% tax on daily hotel and vacation room stays for a 11% total. Hawai’i counties each add their own 3% surcharge, and the state and counties impose a combined 4.712% general excise tax on goods and services including hotel rooms. Together, that will make for a hotel and vacation rental tax rate of nearly 19%.

The ongoing wildlife and climate crises call for “unprecedented and immediate actions to hold polluters accountable,” Barford said. “It is completely reasonable for a jurisdiction that includes communities recently devastated by climate catastrophes to use taxes to prevent further pollution. They deserve financial compensation from those who insist on operating as if the world is not on fire.”