Perry Cooper & Peyton Rhodes (Bloomberg Law): Hawaii ‘Green Fee’ Case to Test Limits of Federal Involvement

The US Court of Appeals for the Ninth Circuit will hear oral arguments [today] on the cruise industry’s federal statutory and constitutional claims against the fee, enacted to offset the environmental impacts of the ships’ visits to Hawaii.

But what makes the case unusual is the federal government’s decision to intervene…

The Multistate Tax Commission’s amicus brief underscores how rare the situation is: “To our knowledge, the federal government has never before sought to intervene in a case where neither the government nor its instrumentalities were subjected to a state tax imposition.”

Tom Yamachika, Testing the Tonnage Clause Two Ways, 120 Tax Notes State 83 (Apr. 13, 2026)

Hawaii is now trying to avoid invalidation by attempting to establish that the challenged levy is on something other than maritime commerce, or that it is not a tax.

One of the state’s primary arguments is that the challenged tax is not a tax on maritime commerce but is simply a tax on transient accommodations. There should be no problem with taxing transient accommodations that happen to be floating in the same manner as their terrestrial counterparts. …

The devil here is in the details.