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NY Senate Committee Passes Cigar Tax Cap

Andrew Nagy
Posted: June 3, 2011

The New York Senate Investigations and Government Operations Committee passed a bill on Thursday that would, if passed, cap the state cigar tax on a single cigar at one dollar.

Senate Bill 3410, now in the hands of the Senate Finance Committee, would cap the state-imposed tax on premium cigars at $1.00 a piece or 75 percent of the wholesale price, whichever is less.

The bill, which has been heavily lobbied for by the New York Tobacconist's Association, the Cigar Rights of America, the International Premium Cigars & Pipe Retailers and the Cigar Association of America, serves two purposes.

Firstly, it would ensure the state a dependable revenue stream. Secondly, the bill protects the state's tobacconists so they can remain competitive with surrounding states, most notable Pennsylvania which does not have a cigar tax of any kind.

"I can sell a box of cigars for, say, $250 to my customer in New York, but he can go to Pennsylvania or the Internet and get that same box of cigars for $130-$150," said Ron Melendi, general manager of De la Concha in New York City and president of the New York Tobacconist's Association, in a press release.

A dollar tax cap was previously defeated in April when it was removed from state budget bill. At that time, the Senate had passed the dollar tax cap in its version of the state budget, but the cap was unable to garner support with the state Assembly.

This time around, though, there is a strong belief among the pro-cigar lobbying groups that the dollar cap could be passed before the legislature adjourns on June 20.

This is because Assemblywoman Michelle Schimel, now in her third-term, has sponsored Assembly Bill 1093, which is virtually the same bill as the one passed in the Senate.

Glynn Loope, executive director of the CRA, has personally met with Schimel and says she is a strong supporter of small business.

"In our meeting, she put it a good way. She said 'This is not about smoking or tobacco, this is about another empty building on Main Street, New York,'" said Loope.

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