Cigar Tax

Cigar tax after cigar tax and I’ve had enough. While this blog is for pairing cigars with wines,  the situation with cigar taxes is getting out of control, with increases at the federal and state level.

On April 1, 2009 the Federal cigar tax went up from 4.75 cents a cigar to 40.26 cents a cigar. That’s an over 800% increase! The largest cigar tax increase in history of America. This tax increase was for President Obama’s program that provides health care insurance to children in families with an annual income of about $80,000 or less. It was funded through a $32.8 billion increase in tobacco taxes and added about $10 per box of cigars.

Now the states are looking to increase the cigar tax to levels that are unprecedented. The Florida Senate has passed the state budget with a $1 per ounce tax on cigars. Based on the average weight of the cigars I smoke, that’s an additional $16 per box of 25 cigars. Florida is from the state with the largest concentration of cigar companies and cigar industry employees. Nearly 90% of the U.S. cigar manufacturing industry is based in Florida.

The impact of the tax on Florida’s economy could be the loss of about 50,000 jobs directly and indirectly related to the cigar industry. If approved by the House and the Governor, the tax compounded with the recent federal cigar tax increase, has the potential to drive companies and retailers out of business, and crush Florida’s cigar industry! Florida’s Governor Charlie Christ is a cigar smoker from Tampa. He is opposed to the tax and knows the detrimental impact that it will have on the state. I’m counting on him to stand up and force the Senate to back down from the tax.

The government is bailing out companies with trillions of dollars, yet they continue to create taxes and policies to exacerbate the unemployment problem. It just does not make sense! While the House of Representatives has not accepted the cigar tax in Florida, the state budget problems and lobbyists for certain industries might push them towards it. What can you do? If you live in Florida you can contact your State Representative and let them know that you are opposed to this tax increase. If the Representatives hold their position, the tax will be defeated.

In New York, the state has approved an increase in the cigar excise tax from 37% to 46%. So now cigars and tobacco products (other than snuff) imported into, or manufactured in the state, on or after April 7, 2009, will pay a tobacco excise tax of 46% of the wholesale price. That means that the retail price will be even higher than the 9% tax increase. Cigar smokers in New York can expect to pay an additional 15% for their cigars.

In Maryland, the State Assembly is currently set to consider two bills that propose to increase the state’s current cigar excise tax rate from 15% to 90%. That’s a whopping 600% tax increase!

Michigan’s Governor may be considering a doubling of the current 32% cigar tax rate. The 32% is based on the manufacturer’s wholesale price, therefore the tax increase would increase the price of a substantially more at the retail level. Arkansas approved an increase in all state tobacco taxes, specifically more than doubling the excise tax on cigars from 32% to 68%.

I can keep on going about the taxes but all of a sudden I’m feeling the need to smoke a cigar before it costs me more. Someday the cigar smokers in the USA will get together and do what the liquor industry did after prohibition, make a pact to “never again” let it happen.