Cigar Aficionado

California Lowers Tobacco Tax

Corrected 06/07/2010

A rare bit of good news for cigar smokers—taxes in California are going down.

The California Board of Equalization will lower the state's surtax on Other Tobacco Products, which includes premium cigars, on July 1. California is one of the largest cigar markets in the country.

Each year, the BOE determines the tobacco products tax rate with a formula that is based on the wholesale premium cigarette price, as it is published by the Tobacco Merchants Association.

This year, the rate will be lowered from 41.11 percent to 33.02 percent.

Surtaxes are paid by distributors, and part of the revenues go to tobacco-health education programs, but the reduction could mean consumers pay a lower price for premium smokes.