The US Department of Justice has moved to join a cruise industry lawsuit challenging Hawaii's new green fee, a tax aimed at funding environmental protection amid tourism's impacts. The fee, set to take effect on January 1, targets hotel guests, short-term visitors, and cruise ship passengers. This intervention highlights growing federal opposition to state climate initiatives under the Trump administration.
Hawaii's green fee, passed by the state Legislature in April 2025, represents the nation's first such tax designed to offset tourism's environmental toll. Starting January 1, 2026, it increases the transient accommodations tax by 0.75 percent to a total of 14 percent for hotel and short-term rental stays, including county charges. For the first time, cruise ship passengers will face the full 14 percent visitor tax based on their time in Hawaiian ports.
State officials project the measure will generate about $100 million annually to support projects addressing climate change and environmental degradation. Jeff Mikulina, chair of Governor Josh Green's Green Fee Advisory Council, noted during a recent webinar that the council is reviewing 620 potential projects estimated to cost $2 billion. He emphasized that even if the cruise industry prevails in the lawsuit, it would only affect cruise cabins and slightly reduce total collections.
The lawsuit, filed by Cruise Lines International Association, argues the fee violates the Constitution's Tonnage Clause and the Rivers and Harbors Act, which restrict states from charging vessels for port access and navigation. On November 29, 2025—one day before the first hearing by federal Judge Jill Otake—the Department of Justice filed a motion to intervene. Assistant Attorney General Stanley Woodward described the fee as a "scheme to extort American citizens and businesses solely to benefit Hawaiʻi."
Richard Wallsgrove, co-director of the University of Hawaii's William S. Richardson School of Law Environmental Law Program, called the DOJ's action "ideologically motivated overreach" by an administration that has labeled climate change a hoax. He questioned the timing: "You have to ask the question: Why this lawsuit and why now? It’s because of this notion the federal government needs to protect U.S. citizens from a climate change hoax, which, you know, couldn’t be a bigger bowl of nonsense."
This case follows the Trump administration's earlier 2025 lawsuit against Hawaii to block state efforts holding fossil fuel companies accountable for climate impacts. Attorney General Pam Bondi leads the DOJ, which has advanced Trump's rollbacks of climate policies; her brother, Bradley Bondi, represents the cruise association. State Attorney General Anne Lopez's office has moved to dismiss the suit and vows to "vigorously defend" the fee's legality.
Cruise Lines spokesman Jim McCarthy stated the industry, which contributes $1 billion yearly to Hawaii's economy, seeks "clear, consistent laws that support Hawaiʻi’s communities, protect the environment, and sustain responsible maritime travel." Representative Adrian Tam, who helped include cruise ships in the tax, expressed confidence in Lopez while adding, "I just wish DOJ would protect our interests as well."
A ruling could determine whether cruise ships face the same taxation as land-based accommodations, potentially shaping the fee's scope.