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Stogie News: Samples at Trade Show Get Tax Exemption

21 Jun 2010

When it comes to cigar news, the highlight of each year is the annual International Premium Cigar & Pipe Retailers (IPCPR) Association Trade Show. Nearly every cigar maker introduces new cigars at the annual event as retailers and media get to try new products for the first time.

cigar-familyManufacturers set up intricate displays (like the one right) that may cost tens of thousands of dollars in hopes of getting hundreds of retailers to commit to carry their products in the upcoming year. Here’s just one example of the high costs of the show: One cigar maker told me that just to hang a display from the ceiling cost many thousands of dollars due to bureaucratic convention work rules.

In addition to the already significant costs, at last year’s show in New Orleans, cigar makers were required to pay Louisiana taxes on the thousands of samples they distributed. The 20% (on wholesale) tax that we reported on last year from the trade show was costing makers as much as $1 per sample. Numerous manufacturers complained about the added financial burden of the tax and a few even said they limited the number of highly sought-after samples they brought.

In light of that burden, the IPCPR announced this week that the 20% tobacco tax, as well as the 4% sales tax ,would not apply to cigar samples handed out during the show. The state taxes on cigarettes remain.

IPCPR Legislative Director Chris McCalla announced, “Understanding the financial stress exhibitors faced last year in dealing with the tax issue, the IPCPR’s Legislative Office and our Louisiana state lobbyist have been working on this exemption since last fall, finally securing this critical tax legislation.”

The legislative exemption comes in the context of the trade show moving back to Las Vegas next year. IPCPR left Las Vegas after a smoking ban there would have banned smoking on the trade show floor. But a special exemption for tobacco-related conventions cleared the way to bring the show—and the millions of dollars of revenue that come with it—back to Sin City.

After two years in New Orleans, the show has committed to a two-year run in Las Vegas for 2011 an 2012, leaving New Orleans without the substantial tourism revenue that the show brings. That move was praised by many of the people I spoke with at last year’s show, in part because of the tax on samples in Louisiana. Now, with their own trade show exemption in place, it seems New Orleans has placed itself back in contention for the IPCPR trade show in 2013.

UPDATE: By email I asked Chris McCalla about the impact of the tax exemption of on the future location of IPCPR Trade Shows. While he reminded me that ultimately it is up to the IPCPR Board where the show is, he did say that the exemption “provides an incentive for cities who are convention-business focused to assist us in deciding what cities may make that short list.” McCalla concluded by noting: “Other factors are considered, but this one is an important one.”

Patrick S

photo credit: Stogie Guys

3 Responses to “Stogie News: Samples at Trade Show Get Tax Exemption”

  1. Bob McDuffee Monday, June 21, 2010 at 5:27 am #

    Nice post and glad to hear about the exemption. Not sure it makes New Orleans better than Vegas but we will see.

  2. Gary Monday, June 21, 2010 at 6:04 pm #

    This is good news. But like Bob I think that Vegas is a better location. August in New Orleans is just too humid!

  3. Al Monday, August 16, 2010 at 6:18 am #

    My experience was out of this world. Did anybody else get floored that someone was selling SULFUR-FREE cigar matches at the show?? Imagine getting that first burn and the rest of the smoke without that sulfur hanging in the air as a bad aftertaste…