Cruise Lines Groups’ Tax Suit Should be Tossed, Hawaii Argues

Cruise line industry groups’ lawsuit accusing Hawaii of imposing an unconstitutional tax on short-term accommodations should be dismissed because the law bars federal courts from intervening in state tax matters, state and county authorities said.

The federal Tax Injunction Act prohibits the US District Court for the District of Hawaii from interfering in state tax administration when a speedy and adequate remedy exists in state court, Hawaii and several counties, including Honolulu, said in a Sept. 19 motion to dismiss.

The primary purpose of the TIA is “to limit drastically federal district court jurisdiction to interfere with so important ...