Hawaiʻi’s Green Fee survives legal challenge, takes effect Jan. 1

Hawaiʻi’s Green Fee will go into full effect on Jan. 1, 2026, after a majority of legal claims challenging Act 96 were dismissed, the state Department of the Attorney General announced.

The Green Fee requires visitors—including cruise ship passengers—to contribute toward addressing the impacts of climate change and protecting Hawaiʻi’s natural resources. State officials say the measure ensures that industries benefiting from Hawaiʻi’s environment help fund its long-term preservation.

“We must protect and preserve Hawaiʻi’s natural resources and safeguard the health of our residents,” Gov. Josh Green said in a statement Tuesday. “Visitors who benefit from our island’s resources have a shared responsibility to help preserve them. The Green Fee ensures that the resources needed to protect Hawaiʻi are available for future generations.”

Under Act 96, the statewide Transient Accommodations Tax (TAT) will increase by 0.75% to 11%, and an 11% tax will be applied to cruise ship passenger bills, prorated based on the number of days vessels spend in Hawaiʻi ports. Counties may also impose an optional surcharge of up to 3%, meaning the combined prorated charge could reach 14%. The state estimates the Green Fee will generate approximately $100 million annually to support climate resilience and environmental protection efforts.

On Tuesday, Anne Lopez said her department was “very pleased” with a ruling by US District Judge Jill A. Otake, who denied a request to block enforcement of the new law.

The vast majority of the cruise industry’s claims were dismissed, according to Lopez.

The lawsuit was filed in August by cruise industry groups and several Hawaiʻi-based tour companies, which argued the law is unconstitutional and could harm tourism by effectively imposing a tax on vessels entering Hawaiʻi ports.

In November, the United States Department of Justice sought to intervene in the case, arguing Hawaiʻi lacks authority to impose the cruise surcharge. Federal attorneys characterized the fee as a “scheme to extort American citizens solely to benefit Hawaiʻi.”

State officials, however, maintain that the Green Fee is lawful and represents a landmark policy aimed at ensuring visitors help fund Hawaiʻi’s response to climate change.

According to court records, plaintiffs plan to appeal. They asked the court to issue an injunction pending appeal and requested an expedited ruling, given that the law goes into effect Jan. 1.

“While the litigation is not over, we are confident in the legality of this law and will continue to vigorously defend it on behalf of the people of Hawaiʻi,” Lopez said.