Windy city cigar lovers could be facing a new cigar tax after Mayor Rahm Emanuel proposed a series of tobacco-related measures at a City Council meeting last Wednesday. Additionally, Emanuel's proposal, dubbed the "Chicago Other Tobacco Products Tax Ordinance," includes language that seeks to increase the minimum age to purchase tobacco products from 18 to 21 years old.
Emanuel is focusing not on cigarettes, but on other tobacco products, a tobacco tax category that includes premium cigars, other cigars, pipe and rolling tobacco, and smokeless tobacco. The proposal would levy a 90 cent tax hike on premium cigars; a 15 cent tax increase on little cigars; a new $6.60-per-ounce tax on roll-your-own tobacco and a tax of $1.80 per ounce on smokeless tobacco.
The current Illinois state excise tax on premium cigars is 36 percent. Cook County, where Chicago is located, also imposes a 30 cent tax on premium cigars. After speaking with a retailer in Chicago, it's unclear whether the 90 cent tax Emanuel wants will be added after state and city sales tax (10.5 percent) are applied, or before. In general, though, an $8.00 cigar that sells for nearly $11 now will jump up to around $12 should the Emanuel tax be passed.
Emanuel's proposal comes only months after he pushed a city budget through that included a record $755 million in new taxes and fees. The mayor estimates the new tax would bring in an additional $6 million, which would be used to fund a one-week summer transition program for all incoming Chicago Public School freshmen and a summer remediation program for at-risk eighth graders.
The next City Council meeting is scheduled for February 10.