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New York Rejects Cigar Tax Cap

Andrew Nagy
Posted: April 4, 2011

After much debate, New York State lawmakers finally passed a $132.5 billion budget last week, but not before throwing out a tax proposal that sought to give some relief to burdened tobacconists by capping the excise taxes on a single cigar to a dollar.

The $1 tax cap was included in the Senate version of the budget, but failed to garner support in the state Assembly.

The lobbying effort for the tax cap was heavy, with the Cigar Rights of America, the International Premium Cigars & Pipe Retailers, the Cigar Association of America and the state-level retailer association all involved.

These organizations had fought to provide some relief for the states' tobacconists who have had to shoulder one of the highest taxes on cigars in the United States—75 percent of the wholesale cost of a cigar—since it was raised last year.

Cigars are typically sold for twice the wholesale price. This means that a cigar with a $6 suggested retail price has a wholesale price of $3, and thus carries a state tax of $2.25 in New York.

Christian A April 5, 2011 11:32am ET
Sad. If they capped tax on cigars they would make more money for NY with reduced prices on sticks. Now individuals will just buy less here. Makes sense right?
stantine972 April 5, 2011 12:04pm ET
Now you know why so many people from NY buy cigars via internet.
Paul Byrne Toronto, Ontario, Canada, April 5, 2011 6:28pm ET
I guess now I just have to drive to Pennsylvania to buy my non-Cubans. Great job New York State! I hear the taxes on hotels in PA are cheaper too... And the restaurants... And the...

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