Gov. Charlie Crist’s hostility toward a looming tax hike on cigarettes has slowly waned over the past few weeks. … But Crist was more clear in saying he opposed an increase of $1 per ounce increase on cigars. The Senate has proposed a $1 per pack increase on cigarettes that also includes the per ounce increase on smokeless tobacco and cigars.

Asked specifically about the cigar tax, Crist said that, “my understanding is there wasn’t discussion that related to cigars until maybe yesterday. Obviously that’s an industry in Florida that has great tradition, especially in the Tampa Bay area and probably other parts of the state. I would rather see that removed."

CRA News Alert – April 2, 2009

Florida State Senate Attacks Cigars With New Taxes

A new shell bill (SB 2438) introduced by Florida Senator Thad Altman was unanimously approved by the State's Senate Finance & Tax Committee; which Sen. Altman chairs.

SB 2438 is an act relating to taxes on cigarettes and other tobacco products (cigars) and would increase taxes on cigars at a rate of $1.00 per ounce!

I didn't see anything in that AP story about Florida starting a cigar tax, although I know it has been discussed. I did read Gov. Crist, who is apparently coming around to some sort of a cigarette tax hike, quoted as saying he would rather not hit the state's historic cigar makers with a tax.

I have not checked on PA lately, but the state's small number of tobacco growers are disproportionally powerful as a lobbying group. Gov. Rendell keeps proposing taxes on chew and cigars and they never get traction.

Last I read, the cigar taxes in FL and PA were unlikely to go anywhere, even if cigarette taxes go up.

Overall cigar sales will stay healthy, alothough all tax hiked depress volume somewhat. I don’t see a shift to cheap bands and boxes.

And I say the cigar industry has already had some success, based on the reduction of SCHIP’s cap from $10 to 40 cents.