Legislation

Michigan Tobacco Tax Cap Passed by State Senate

Oct 28, 2021 | By Thomas Pappalardo
Michigan Tobacco Tax Cap Passed by State Senate
Photo/Rey Del Rio via Getty Images

Michigan retailers and cigar smokers can breathe a sigh of relief concerning the state’s 50-cent cigar tax cap. A vote was held by the state senate on Tuesday afternoon and House Bill 4485, which preserves the tax cap without expiration or inflation index, passed in a bipartisan victory of 28 to six, with two abstaining votes.

House Bill 4485 was first brought before the Michigan House Tax Policy Committee by Representative Matt Hall (R-Marshall), in April of this year to preserve the 50-cent tax cap that has been in place since 2012 and was set to expire this month.

Prior to the tax cap, a cigar tax was in place that charged consumers 32.4 percent of a cigar’s wholesale price. At the time, the tax cap was an experimental measure.

“The whole idea of the tax cap was leveling the playing field between online and brick and mortar,” David Jessup, executive director for the Michigan Premium Cigar & Pipe Retailers Association told Cigar Aficionado. The Michigan Premium Cigar & Pipe Retailers Association has been an instrumental part of the movement to preserve the tax cap.

Throughout its various stages, preserving Michigan’s tobacco tax cap has been an issue that’s transcended party lines. During April’s Michigan House Tax Policy Committee meeting, the committee (nine Republicans and six Democrats) passed the measure 13-2. In May of this year, House Bill 4485 passed with a landslide victory of 83 to 25 (with two abstensions) in Michigan’s Republican-led House of Representatives (58 Republicans and 52 Democrats). Michigan’s Senate consists of 20 Republicans and 16 Democrats.

Now that the measure has cleared its final legislative hurdle, the bill is heading to the desk of Michigan governor Gretchen Whitmer where it’s expected to be signed in the very near future.

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