Wednesday, May 06 2009
While Good News for Some, Not Good for Other Tobacco Products
From: Chris McCalla, Legislative Dir.,
IPCPR
Following months of professional and grassroots lobbying, the joint House-Senate Committee working out the final details of the state's proposed budget has agreed to remove the punitive cigar tax from the proposal (SB 1840).
Originally, SB1840 proposed to tax large (including premium) cigars at $1 per ounce and little cigars at $1 per pack of 20. According to the Cigar Association of America, cigars were the only tobacco products to be removed from proposed tax increases.
The taxes on all other tobacco products will increase effective July 1. The full legislature will vote Friday morning on the conference agreement.
As detailed in a CAA memo to its membership, the conferees agreed to a $1 per pack surcharge on cigarettes and an additional surcharge of between 60% and 70% on other tobacco products (probably 60% which would bring the OTP tax rate up to 85%). There will be a surcharge on inventories of all tobacco products (except cigars) on July 1.
This surcharge is allowed to be paid in four equal installments on July 21, August 10, August 30 and September 9. A 5% administrative cost will be allowed against the inventory surcharge. The bill also includes restrictions on mail order, Internet and remote sales of all tobacco products except cigars.
For more information about tobacco legislation in your state, please visit The International Premium Cigar and Pipe Retailers Association website.
