Tax

Cigars are taxed at various rates, which are typically passed onto the consumer. All cigars sold in the United States are accessed a federal excise tax when imported. The federal excise tax on large cigars used to be modest, less than five cents per cigar, until April 2009 when the $32.8 billion expansion of the State Children’s Health Care Initiative (SCHIP) caused the federal excise tax to balloon to 40.26 cents per cigar. Some companies didn’t increase prices, but most did. Most states charge a tobacco tax, which is assessed at the cash register. Taxes are one of the reasons why cigars may seem more expensive at the cigar shop than they appear in Cigar Aficionado magazine.