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.