Trump administration targets hawaii’s groundbreaking tourism climate fee in federal court challenge

The Trump administration has escalated its fight against climate initiatives by moving to join a cruise industry lawsuit challenging Hawaii’s historic “green fee” – the nation’s first tax specifically designed to offset tourism’s environmental impact. The Department of Justice filed a motion earlier this month to intervene in Cruise Lines International’s case against the state, with Assistant Attorney General Stanley Woodward denouncing the fee as a “scheme to extort American citizens and businesses.”

Starting in January, Hawaii’s new climate tax will add 0.75% to the existing transient accommodations tax, bringing the total to 14% for hotel guests and short-term visitors. Cruise ship passengers will face the full 14% charge for the first time, representing a significant new cost for maritime tourism. State officials project the fee will generate approximately $100 million annually to fund climate adaptation and environmental restoration projects across the islands.

The legal challenge centers on constitutional questions about states’ authority to tax maritime vessels, with the cruise industry arguing the fee violates federal maritime laws. However, legal experts view the DOJ’s intervention as ideologically motivated, particularly given the Trump administration’s consistent opposition to climate action. Adding to the controversy, Attorney General Pam Bondi’s brother serves as lead attorney for the cruise industry plaintiffs, raising questions about potential conflicts of interest.

If implemented fully, the green fee would fund an ambitious $2 billion portfolio of environmental projects. The case’s outcome could set important precedents for how states can finance climate initiatives through tourism taxation, making it a closely watched test of state versus federal authority on environmental policy.