Judge Allows Hawai‘i Green Fee to Take Effect, Lawsuit Continues

U.S. District Judge Jill Otake denied a motion for a preliminary injunction seeking to block Hawai‘i Act 96 on December 23, 2025, a decision that permits the law known as the Green fee, a transient accommodation tax on cruise ships, to begin on January 1, 2026. Judge Otake dismissed most of the plaintiffs claims at this preliminary stage and refused to halt the statute while the case continues through litigation.

The lawsuit was filed by a coalition that includes Cruise Lines International Association, Honolulu Ship Supply Co., Kaua‘i Kilohana Partners, and other industry and local business interests. Plaintiffs argued the state law conflicts with federal statutes including the Tonnage Clause and the Rivers and Harbors Appropriation Act. State and county defendants countered that plaintiffs lacked standing and that the Tax Injunction Act and principles of comity require tax disputes to be resolved in state court rather than federal court.

Hawai‘i Attorney General Anne Lopez issued a statement saying the state was pleased with the ruling and that the litigation will continue. That leaves an active legal dispute over the scope and constitutionality of the law, while the statute itself is set to be enforced as scheduled.

For Kaua‘i residents and officials, the ruling matters immediately. The fee applies to cruise passengers and port calls, a change that will affect harbor operations, ship scheduling, and local tourism planning beginning in 2026. County revenue flows tied to transient visitor taxes and related distributions may shift as collections begin under the new law. Cruise operators and harbor service providers must decide whether to alter itineraries or pass costs to passengers, choices that could influence visitor numbers and local business activity.

Local government agencies now face a period of dual uncertainty, where statutory collection can proceed even as courts continue to adjudicate constitutional and federal law challenges. County leaders and community stakeholders will need to monitor both the implementation steps at harbors and ongoing litigation outcomes to understand long term effects on Kaua‘i tourism and public finance.