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Legislation

PCA Launches Campaign to Oppose Cigar Tax Increase

New bills could, at the very least, triple federal tax on cigars
Sep 25, 2019 | By Andrew Nagy
PCA Launches Campaign to Oppose Cigar Tax Increase

Two bills have recently been introduced in Washington D.C. to help curtail the national youth vaping epidemic. Unfortunately for cigar enthusiasts, both measures would also increase the federal tax rate on premium cigars. To help prevent a tax hike, the Premium Cigar Association has launched a nationwide email and social media campaign to garner support from the premium cigar community and make it simple to contact elected officials.

Senate bill 2517, The Tobacco Tax Equity Act of 2019, was introduced by Sen. Richard Durbin (D-IL) last week, and seeks to establish the first federal e-cigarette tax and boost the tax rate on other tobacco products such as cigars and pipe tobacco. Currently, the tax rate levied on most premium cigars is 52.75 percent of the cigar’s price.

The bill would replace that tax with a new taxed based on weight, rather than value, and it would end up costing much more for cigars. The new large cigar tax rate would be “$49.56 per pound and a proportionate tax at the like rate on all fractional parts of a pound, but not less than 10.066 cents per cigar for large cigars.”

Rep. Tom Suozzi (D-Long Island, Queens) also introduced legislation that would increase the tax on premium cigars. Called the Quell Underage Inhaling of Toxic Substances (QUITS) Act, Suozzi’s bill amends the current tax rate to “$73.85 per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than 15 cents per cigar.”

The new proposed taxes don’t make for an easy comparison to the old, but according to Joshua Habursky, director of federal affairs for the Premium Cigar Association, these new rates would, at the very least, triple the tax rate on premium cigars.

To help fight that tax hike, the PCA has created a portal on its website that streamlines the process for contacting elected officials.

"We are not going to sit idly by when Congress gives speeches against vaping, but their actual policies attack premium cigars and pipe tobacco, which are not part of the youth access problem, " said Joshua Habursky, director of federal affairs for the Premium Cigar Association, in a press release. "These are cringeworthy tax increases that hurt retailer small business owners, employees, manufacturers, and ultimately every cigar enthusiast.”

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