The Stogie Guys

As early as today the Senate is set to pass a bill to impose state and local sales tax on all internet purchases, including cigars. Named the “Marketplace Fairness Act” by its supporters, the bill would require internet and mail-order retailers to collect sales tax on all transactions.

Currently, such purchases include state sales tax if the retailer has a physical presence in the state where the customer resides, but a Supreme Court ruling prohibits a state or locality from requiring businesses in other jurisdictions to collect such taxes. Technically, consumers may be required to self-report such taxable items, but the reality is only a fraction of those taxes are actually collected.

The bill easily passed a procedural hurdle yesterday, and President Obama has issued a statement of support. The bill has moved through the usually slow-moving Senate at breakneck speed, as it was only introduced one week ago while the nation’s attention was focused on the tragic attack in Boston. It’s expected to pass the Senate as soon as today, although it’s not clear if it has the support of a majority of legislators in the House or, critically, Republican House leadership.

Critics suggest the bill is “a tax grab and a bureaucratic nightmare…an infringement on states’ rights and a federal encroachment on the almost-sacred ground of Internet commerce.” While that all may be true, the bill poses a special threat to cigars due to the fact that 48 out of 50 states tax cigars with an additional excise tax.

Bill Could Trigger State Cigar Tax Increases, Online and Off

Currently only Florida and Pennsylvania don’t have an additional excise tax on cigars (and New Hampshire doesn’t tax “premium cigars”), with over a dozen states taxing cigars at 50% or more of the wholesale or manufacturer price (pdf), which amount to a few dollars per cigar. Given the vast differences in excise taxes, it is no surprise that most of the largest online and catalog retailers are based in Pennsylvania or Florida, including Cigars International, Famous Smoke Shop, and Thompson Cigar.

One cigar industry expert I spoke with estimated that as much as 60% of all cigars are now sold either online or through mail order, and that states would quickly move to force online retailers to collect cigar excise taxes in addition to regular sales taxes. The issue has largely gone under the radar since cigars (as part of the “Other Tobacco Products” or OTP designation) are one of only a handful of products that are subject to state excise tax and are sold online. (Tires, through online retailers such as TireRack.com, and wine, depending on state shipping rules, are two other examples of goods subject to state excise taxes that are often sold online.)

While it’s not clear that online retailers would immediately be subject to excise tax in the same way that they would be for sales tax in the jurisdiction of the customer under the internet sales tax legislation, the bill does appear to clear the legal hurdle to doing so. Under one scenario, states could start demanding that out-of-state retailers begin collecting state tobacco taxes almost immediately, claiming that they are now authorized to do so. Under another scenario, if states faced resistance, it would not be difficult for legislatures to re-brand their excise taxes as a special sales tax.

That result would have implications beyond just online and catalog cigar purchases. Currently, one of the best reasons for not raising state OTP excise taxes is that a high tax rate is likely to drive sales online, eliminating tax revenues and pushing purchases away from local businesses. Without states worried about driving sales to untaxed, out-of-state businesses under the so-called “Marketplace Fairness Act,” OTP tobacco tax increases may soon multiply across the country as fiscally strained states look for more revenue.

Further, unlike across-the-board sales tax increases which anger wide swaths of voters, targeted tax increases on cigar smokers only affect a small percentage of voters, making them an especially easy target.

–Patrick S

photo credit: Stogie Guys

My consumption of La Aurora cigars seemed to drop off right around José Blanco’s departure from the oldest cigar maker in the Dominican Republic. But the relationship between these two events is merely correlation, not cause-and-effect.

Several years ago, my humidors were always full of La Aurora sticks of various blends—Barrel Aged, 107, Guillermo León, Escogidos, 1495, Preferidos, 100 Años, etc. Nowadays I don’t keep much La Aurora inventory. I’m not really sure why since, as a whole, I always enjoyed the creations from this storied cigar maker.

Perusing the shelves of my tobacconist the other day, I came across the Belicoso (6.25 x 52) from La Aurora’s original Cameroon-wrapped line. The price point of $3.95 was attractive, as was the prospect of reengaging with an affordable blend I hadn’t smoked in a long while.

Perhaps you, too, have been away from this value-priced smoke for some time. In that case, let me refresh your memory. It comes complete with a Dominican binder, Dominican and Nicaraguan filler tobaccos, and a clean, golden wrapper with few veins and considerable tooth. The foot smells of hay and honey and the cold draw is easy with some spice on the lips.

After establishing an even light, that spice carries over to the flavor, which is characterized by dry cedar, pepper, and warm tobacco. A half-inch in, the texture becomes less salty and the spice more muted as a candied pecan taste comes to the fore. Cedar remains the dominant note, now complemented nicely by creamy nut and sweetness. Smoking slowly is advised to help avoid the onset of mustiness.

Construction is top-notch. The white ash holds firm for an inch or more. The burn line is set-it-and-forget-it straight. The draw is effortless. And each puff produces ample plumes of aromatic smoke.

No, this isn’t a terribly complex or memorable cigar. But the quality, consistency, flavor, and value make it a solid choice for everyday smoking or the golf course. Keep the La Aurora Belicoso in mind if you’re looking for a decent Cameroon-wrapped smoke that won’t break the bank. It’s worthy of three stogies out of five.

[To read more StogieGuys.com cigar reviews, please click here.]

–Patrick A

photo credit: Stogie Guys

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”

If there’s a cigar with a better looking wrapper, I’ve never seen it. The Ecuadorian Habano 2000 applied expertly to this Limited Edition (6 x 52) is silky and veinless. Befitting the name—a complex chord used in jazz arrangements—the filler combines numerous Dominican leaves and Peruvian tobacco. The smoking experience is complex as well, though somewhat delicate and requiring careful attention. Issued to celebrate Avo Uvezian’s March 22 birthday, the $15 toro is a fine smoke. And if you buy one of the 9,000 boxes of 10 you’ll get a USB stick with Uvezian performing a song composed in honor of the cigar.

Verdict = Buy.

–George E

photo credit: N/A

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”

There was a time not long ago when this was one of the hottest cigars around. Now I don’t hear much about it. Still, it’s a well-made cigar by Oliva, even if Sam Leccia, formerly the face of Cain (and Nub), is about to launch his own independent company. While not as full-bodied as I remember (perhaps due to the two plus years in my humidor) it’s still a medium- to full-bodied stick with lots of spicy wood and pepper. For a cigar with so much ligero (82%, Leccia told us back in 2009) it demonstrates excellent combustion.

Verdict = Buy.

–Patrick S

photo credit: Stogie Guys

As we have since July 2006, each Friday we’ll post a mixed bag of quick cigar news and other items of interest. Below is our latest Friday Sampler.

1) International Premium Cigar and Pipe Retailers Association (IPCPR) Legislative Director Chris McCalla’s role with the group is ending in an apparent restructuring. In a post on Facebook, McCalla (right) wrote the following: “[M]y position here with IPCPR is being dissolved and a new state director position created and operated out of D.C. Please know while no one is more disappointed than me, I am not bitter, and look forward to what may lie ahead. At this point, I do not know my last day, so I should be around for a couple of months (best guess). Lots of moving parts involved in this process. It’s been a pleasure and a privilege serving as IPCPR’s first legislative director.”

2) The New York Times Magazine recently featured a story about a pipe smoker who found a unique, special tobacco and eventually went to Belgium to meet the man responsible for making it. The story is an ode to the artisanal potential of tobacco, in this case pipe tobacco, and the pleasant experiences that can be associated with it. The comments also make for an interesting read, with equal parts hand-wringing over an article putting tobacco in a good light, and comments praising the article for it’s evocative writing.

3) In yet another example of the cigar community’s charitable generosity, Cigar Aficionado‘s 19th annual Night to Remember Fundraiser was held this week in New York. Rush Limbaugh and Rudy Guiliani spoke to the crowd at the Four Seasons restaurant about the importance of cigars and the threats to our freedom to smoke. The event raised $1.2 million for the Prostate Cancer Foundation.

4) Inside the Industry: Erik Espinosa, owner of La Zona in Esteli, Nicaragua, has announced a new size in his 601 “La Bomba” line, a massive “F Bomb” (7 x 70). La Palina is expanding distribution to Europe where Mythical Cigars Europe will serve as the official distributor.

5) Deal of the Week: Toraño is a brand that’s sometimes overlooked but seems to consistently make solid cigars. If you’re looking to try a few, check out this sampler of four Toraño torpedos for just $16.50 ($10 off MSRP).

–The Stogie Guys

photo credit: IPCPR Email Newsletter

Those who hate all tobacco are constantly trying to equate premium cigars with “Big Tobacco,” which they view as an an evil not seen since the Galactic Empire in Star Wars (a long time ago in a galaxy far, far away).

Which should, but won’t, make them feel a bit uncomfortable about being on the same side as Big Tobacco when it comes to FDA regulation of cigars. A recent article in The Hill makes it clear that when it comes to the bill to stop the FDA from expanding its oversight to include premium handmade cigars, the biggest of cigarette companies stands with the tobacco control groups that detest everything about Big Tobacco:

Cigar companies are going up against tobacco giant Altria, the parent company for Philip Morris USA, which backs expanded FDA oversight and opposes Posey’s legislation. “We believe cigars are a product that are made for adults, have health issues related to them, and have tobacco. We believe the FDA asserting its jurisdictional authority over them is appropriate,” said David Sylvia, a spokesman for Altria.

Altria, it’s worth noting, originally supported the original FDA bill to regulate tobacco because, according to Forbes, the bill “solidifies the position of the producer with the greatest market share—Altria—which makes 50% of all cigarettes in the U.S.”

If Big Tobacco is the unmitigated evil that anti-tobacco zealots say they are, then maybe they need to re-examine their position, which is now the same as the Marlboro Man.

My own view of so-called Big Tobacco is more nuanced. First off, I believe cigarettes, like cigars, should be a legal product which adults should be free to choose to consume. I’d concede that there was a time when the largest cigarettes companies probably misled the public about the health effects of their products. But that doesn’t change the fact that tobacco is and should be a legal product in a free society, or that every smoker now understands that there are serious risks to smoking, especially cigarettes. (In fact, studies suggest smokers overestimate the health effects of smoking.)

Which brings me back to the politics of Big Tobacco, cigars, and the FDA. If cigarette companies’ position is that the bill stopping the FDA from regulation cigars should be opposed because all tobacco should be free from FDA oversight and they want cigar smokers as an ally in that fight, then I’d have some sympathy.

In fact, ultimately I agree with that position while realizing that in the short term it is politically impossible. So the best position right now is articulated by Glynn Loope of Cigar Rights of America to The Hill: “When Congress passed the original Tobacco Control Act, it was really to address two primary points: youth access to tobacco and chemical addition. Premium cigars don’t meet that criteria.”

But that’s not the position of Philip Morris USA, which is the quintessential “Big Tobacco” company. Philip Morris lobbied for the FDA bill, which apparently they feel is best for their bottom line by stifling their competitors, and now they are seeking to force cigars under the same onerous regulations.

All of which is a long way of saying, the next time you talk with someone who opposes the “Traditional Cigar Manufacturing and Small Business Jobs Preservation Act” to repeal the FDA’s authority to regulate cigars, feel free to ask them why they are taking the side of Big Tobacco against the little guy.

–Patrick S

photo credit: FDA

When the man who made La Gloria Cubana a household name started his new family-run company in 2009, few in the cigar industry doubted he would be successful in his new venture. To date, by seemingly every measure, he has been.

One undertaking that has helped solidify Ernesto Perez-Carrillo’s post-General Cigar success has been Short Run. So far, the line has resulted in one release per year (although, when it was first introduced, we were told there might be two Short Run blends per year). The concept is pretty simple: Make a limited run of a blend using tobacco that isn’t available in enough quantities for a full-blown release.

The original Short Run, introduced in 2010, featured an Ecuadorian Sumatra wrapper. The 2012 edition was wrapped in the Ecuadorian Connecticut leaf from the New Wave Connecticut around binder and filler tobaccos from the Core Line Maduro (Ecuadorian binder with Dominican and Nicaraguan filler).

The 2011 Short Run—the subject of today’s review—has an Ecuadorian Habano wrapper around Nicaraguan and Dominican tobaccos. Slightly less than 25,000 were made. I sampled several in the Cañonazos format (5.9 x 52), which is marked with an intricate roadmap of thin veins. The pre-light aroma is light, sweet, and a little musty, and the cold draw is moderately tight, though not burdensome.

That draw opens considerably once the foot is lit. Each puff is easy and the smoke production is voluminous—enough so to make a comparison to many Drew Estate sticks. This isn’t surprising. Jonathan Drew told me that, back in the day, Perez-Carrillo helped Drew Estate perfect its trademark draw.

The flavor can best be described as café au lait, cedar, and white pepper. The finish has a lingering spice yet hardly any nicotine kick. On the retrohale, the smoke is a little sweeter, though this cigar lacks the sweetness and creaminess that was a staple of the 2010 Short Run.

But don’t get me wrong. The E.P. Carrillo Short Run 2011 Cañonazos is a fine specimen at a very reasonable price point ($6 at my local tobacconist here in Chicago). Construction is superb and the medium-bodied profile is more than pleasing to my palate. All this results in a solid rating of four stogies out of five.

[To read more StogieGuys.com cigar reviews, please click here.]

–Patrick A

photo credit: Stogie Guys