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Pennsylvania Escapes Cigar Tax

Andrew Nagy
Posted: October 9, 2009

Pennsylvania cigar lovers may soon have cause to celebrate as lawmakers presented the governor a bill to end the state's 101-day budget impasse that does not include a tax on large cigars.

Previous versions of the budget bill HB1531 had included the state's first-ever cigar tax of 30 percent. Aside from Florida, Pennsylvania is the only state in the union not to tax premium cigars.

The cigar tax, as well as taxes on natural-gas drilling, performance arts and small games of chance, became the focus of a political battle between Democrats, who control the House, and Republicans, who hold a majority in the Senate, that has lasted 101 days.

House Democrats changed course Wednesday, passing a tax code bill with no cigar tax that the Senate Republicans approved yesterday, and now the bill awaits Governor Rendell's signature.

"CRA again commends the actions of the Pennsylvania Senate, which protects the rich family history that the Commonweath has with the premium cigar business," said Glynn Loope, executive director of the Cigar Rights of America. "We certainly hope that Gov. Rendell signs the bill as adopted by the Senate, and that a budget deal without the planned regressive cigar tax can be adopted."

Although premium cigars will not be taxed if the bill becomes law, little cigars were not so lucky. The bill would impose a tax of eight cents per stick.