Industry Rebuffs Hawaii After Cruise Taxes Are Proposed
At least one cruise line is crying foul after Hawaii lawmakers approved measures that would charge a head tax on cruise guests visiting the destination and/or expand the state’s accommodations tax to include cruise ships.
Either way, the moves would add to the cost of voyages that call at any port in the Hawaiian Islands or that travel on inter-island itineraries roundtrip from Honolulu. Just one cruise line offers the latter, Norwegian Cruise Line, and that brand is looking to stop the implementation of the bills.
Norwegian Cruise Line’s Pride of America is able to sail inter-island cruises roundtrip from the Honolulu Cruise Port because it is US-flagged. Under US maritime law, all foreign-flagged ships are prohibited from doing so.
Local media reports indicate that Norwegian Cruise Line has threatened to sue the state over the measures or pull its ship from the region.
“We ask that you advise the Governor of these issues and take action to avoid costly and time-consuming litigation that will be forced upon the State and our clients should either of these proposals become law,” states a letter from Norwegian Cruise Line.
But Hawaii officials disagree, telling HawaiiNewsNow that the legislation simply asks cruise ships to pay their fair share.
“It should be a no-brainer. They are benefiting from Hawaii’s natural beauty,” Rep. Adrian Tam, of Hawaii’s House Tourism Committee, told the outlet.
Under HB504, a cruise passenger head tax of $20 per port entry would be charged starting on January 1, 2027. The per-port entry fee would add significantly to itineraries offered by Pride of America, since the ship visits multiple islands on her 7-night voyages through the islands.
Another bill, SB1396, calls for the state’s Transient Accommodations Tax (TAT) to be applied to cruise cabins starting on January 1, 2027. The TAT is charged on short-term land accommodations of less than 180 days and is currently set at 10.25%.
“There is no existing transient accommodations tax levied on commercial passenger vessels, which in 2024, accounted for 972,820 passenger port calls at port facilities under the jurisdiction of the department of transportation,” the text of SB1396 states.
“The legislature believes that a modest increase in the transient accommodations tax can generate greatly needed funding to support the restoration of the State’s valuable natural resources, help prevent and respond to the climate crisis, and leave a strengthened environmental legacy for future generations,” it adds.
Proposed Tax Legislation Can Still Be Amended
According to the local media reports, cruise line officials currently are lobbying Hawaii lawmakers to halt the measures. While the bills were passed in the state Legislature, work on them continues in conference committee, where the content could be significantly altered.
If it eventually passes, the Hawaii governor will have to sign them into law.
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Besides Pride of America, many cruise ships call at Hawaiian ports on world voyages, repositioning cruises between the South Pacific and the US West Coast, and other itineraries.
Cunard’s Queen Anne, Viking’s Viking Sky, Oceania Cruises’ Insignia, and Princess Cruises’ Island Princess, for example, all will call at Honolulu, the destination’s largest cruise port, during their world cruises currently underway.
Norwegian Cruise Line’s 2,200-guest Pride of America, one of 20 ships in the line’s fleet, sails year-round from Honolulu, with her weeklong voyages calling at Kahului, Maui; Hilo and Kailua Kona, Big Island of Hawaii; and Nawiliwili, Kauai.