Legislation

California Cigar Tax to Increase in July

May 18, 2021 | By Thomas Pappalardo
California Cigar Tax to Increase in July
Photo/David Paul Morris via Getty Images

Cigar smokers in the Golden State will have to reach a little deeper into their pockets this summer as the California Department of Tax and Fee Administration (CDTFA) has increased the state’s tobacco tax by 11.5 percent. The tax hike will go into effect on the first of July.

According to a notice on the CDTFA’s website, the tax is “equivalent to the combined rate of tax imposed on cigarettes.” For cigars, that means that the tobacco tax in California has increased from the 56.93 percent of the wholesale price that was implemented July 1, 2020, to 63.49 percent of the wholesale price. 

Every year, the CDTFA is required to reevaulate its tax rate for “Other Tobacco Products” (OTP) and determine whether or not to increase the taxes. Cigars fall into the OTP category, which includes pipe tobacco and snuff, although cigarettes do not fall under OTP classification and are taxed differently. 

As it has in previous years, the new tax will go into effect on July 1 and will expire June 30 of the following year to be reevaluated by the CDTFA and may go up or down.

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