A state legislative committee advanced a bill Thurs. Jan 12 that would dramatically reduce the tax on cigars. It now heads to the senate floor.
The bill, Senate File 42, would cap the tax on cigars at 30 cents per cigar. That's a change from the current tax rate of 20 percent — and it would significantly decrease the taxes charged on most premium cigars in the state.
Right now, if a premium cigar costs $10, you'd have to pay $2 in taxes. Under the new scheme, you'd pay just 30 cents, no matter how expensive the cigar is.
Tobacco industry representatives voiced their support during the revenue committee's meeting. But Kristen Page-Nei of the American Cancer Society’s Cancer Action Network said lowering the price of cigars makes it more likely that kids will gain access.
"We're in the business of trying to eliminate cancer and reduce the pain and suffering for those who do have cancer," she said. "And we know youth are price-sensitive and this is the best way for us to prevent future generations from becoming addicted to these products."
Glenn Loope is the director of state advocacy for the national Premium Cigar Association. He said cigars, specifically, should not be viewed like other tobacco products.
"The average American cigar smoker — that considers himself a cigar smoker — has two per week," Loope said. "We could have two in one week and go three weeks without one which clearly denotes the lack of addiction qualities associated with large cigars. So, we don't view this as a public health threat, or something that complicates your public health issues in any way, shape, or form."
But a representative from the American Heart Association (AHA) refuted that claim in her own testimony.
"Studies have shown that cigar smokers do inhale, thereby absorbing smoke into their lungs and bloodstream and depositing smoke particles in their lungs, as well as their stomachs and digestive tract," said Liz Albers, state government director for the AHA. "Furthermore, all cigar smokers — whether or not they inhale — expose their lips, tongue and throat to smoke and its toxic cancer-causing agents. Cigar smoke is composed of the same toxic and carcinogenic components found in cigarette smoke. And each year approximately 9,000 Americans die prematurely from regular cigar use."
Both Albers and Page-Nei highlighted the healthcare costs associated with increased tobacco use and addiction — costs that are partially paid by all taxpayers.
The bill singles out cigars specifically and doesn't affect snuff, cigarettes or e-cigarettes. Several members of the committee lamented the complicated way different tobacco products are currently taxed.
"It doesn't really make a lot of sense what our predecessors have done to us," Committee Chairman Bo Biteman said. "But that might be a theme you'll see throughout our two years on this committee: we're going to take a look at why things are the way they are and maybe we can simplify our code and make it more equitable across the board."
But there's another bill on the table this session that would actually increase the unrelated tax on cigarettes, from the current three cents per cigarette to more than five cents. That bill — House Bill 58 — is currently before the House Revenue Committee.
