Legislation

New York Nixes Cigar Tax From Final Version Of State Budget

Apr 2, 2018 | By Blake Droesch
New York Nixes Cigar Tax From Final Version Of State Budget

Language that would have raised taxes on cigars in New York State, and caused prices to soar, was removed from the final version of Gov. Andrew Cuomo’s 2019 Executive Budget. Lawmakers in Albany struck a deal on the budget early Saturday morning and the bill has since been delivered to the desk of Gov. Cuomo, who is expected to sign it into law.

While the original version of the budget did not raise the tax percentage of cigars, which is currently 75 percent of the wholesale price, it removed an “industry standard adjustment ratio” clause that allows retailers to charge a much lower rate of 28.5 percent. Saturday’s deal means cigar pricing will remain unchanged.

The section of the original 2018–2019 Executive Budget proposal that pertained to wholesale tobacco prices was intentionally omitted from a subsequent version published on March 13 and did not reappear in what would become the final version, which was substituted in on March 30.

Lawmakers were able to strike a deal on the budget less than 24 hours before the April 1 deadline. Gov. Cuomo praised the budget, calling it a “bold blueprint for progressive action,” despite many of his proposed revenue actions—including the altering of cigar taxes—being absent from the final version of the bill.

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