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Maryland Cigar Tax Hike Discussed

Michael Moretti
Posted: March 4, 2008

A bill to raise Maryland's cigar tax another 10 percent is being considered by the state Senate and House of Representatives.

The bill aims to increase Maryland's Other Tobacco Products tax, which includes cigars as well as other non-cigarette tobacco, from 15 percent of the wholesale price to 25 percent, which would add an estimated $16.5 million to the 2009 budget for the state's Cigarette Restitution Fund. The fund is set up to pay for programs promoting smoking cessation and prevention. A similar bill has been proposed in New Hampshire.

Maryland instituted the 15 percent tax on cigars in May 1999, becoming the 44th state to adopt a tax addressing cigars specifically. In February of this year, the state implemented a comprehensive statewide indoor smoking ban, which includes restaurants and bars.

The tax increase would take effect on July 1, 2008.