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California Proposes Higher Tax on Cigars

Andrew Nagy
Posted: April 9, 2012

The right to enjoy a premium cigar in California is once again under attack, this time in the form of a higher excise tax.

On June 5, California voters will go to the polls to decide whether or not to pass Proposition 29, or the California Cancer Research Act, an initiative that raises the tax on cigarettes and other tobacco products (OTP). Revenues from the tax proposal are to be doled out to various cancer research funds as well as anti-smoking campaigns.

The proposal would greatly increase the excise tax on cigars and other products that fall into the OTP category in California from 31.73 percent of the wholesale cost to 54.89 percent.

For the past two years, the state’s Board of Equalization, which controls tobacco taxation, had decreased the OTP tax. In 2010, the board lowered the tax from 41.11 percent to 33.02 percent, and the tax was again decreased last year to its current 31.73 percent.

Cigar lobbying groups like the Cigar Rights of America and the International Premium Cigars and Pipe Retailers association have pledged to fight Proposition 29. Both the IPCPR and the CRA are committing resources to help California Citizens Against Wasteful Taxes, a ballot measure committee composed of California cigar enthusiasts, retailers, importers, and distributors.

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Comments   6 comment(s)

GREGORY HAYES JR — COMPTON, CA, UNITED STATES,  —  April 10, 2012 12:29am ET

We need you help out here in Calif. get out and strike this prop 29 down. Vote NO on 29


John Rohrer — Las Vegas, NV., USA,  —  April 10, 2012 1:12pm ET

The combination of Moonbeam Brown and President Obama puts a heavy gray overcast on true blue blooded Cigar aficionado’s. Attacking smokers to fund and justify their communistic ideology is criminal. I guess Obama and Brown think only the ultra rich enjoy a fine cigar and therefore can pay the extra burden.


Michael Tarone — Bellefonte, PA, USA,  —  April 10, 2012 3:41pm ET

What the anti tobacco go gooders don't realize is that if they raise the taxes too high, not only the smokers will stop buying cigars, but tobacco businesses will close up permanently or move out of state. The same thing has happened in NY state. That means lost jobs, and the existing tax base gone. There is a limit to what people can/will pay.


joel hoffman — scranton, pa, usa,  —  April 11, 2012 10:39am ET

smoke all the pot you want but tobacco heck no california logic at its finest


GREGORY HAYES JR — LOS ANGELES, CA, UNITED STATES,  —  April 11, 2012 12:03pm ET

Calif and the Fed gov need to make up there minds--They seem to want to make money from the taxes, yet they want to ban smoking. I love my state but it can really do things twisted and backwards.

I am thankful for organizations like the Cigar Rights of America & the IPCPR.


Jason Kayorie — Toronto, Ontario, Canada,  —  April 11, 2012 7:03pm ET

--> Michael Tarone

You would think this, however up here in Ontario Canada, my clients happily pay the 70% excise tax. Casa Magna Robusto: $12. Alec Bradley Black Market Robusto: $13 etc and they still sell a butt load of tobacco in Newfound Land where the tobacco tax is a generous 120%


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