New York State Cigar Tax Raised to 75%, Threatening Small Businesses

As of last night, cigar tax in our home state of New York was increased from 46% to 75%. As of August 1, all New York State businesses and consumers will shelling out even bigger bucks for our sticks to make up for a budget crisis of epic proportions.

As a cigar retailer, it’s obvious that we’d be opposed to this tax. But on a common-sense ground, we still can’t find the logic in this increase. The stated purpose is to increase tax revenue, but will cigar stores around the state likely to close up shop, we expect to see cigar tax revenue to remain about the same at the expense of shuttering small businesses and creating even worse unemployment.

Cigar Aficionado posted this bleak take on the tax yesterday. They gave the example of a $6 cigar costing $7.38 with the current tax, but balooning to $8.25 with the new tax. According to them, a box of high-end $20 cigars would be taxed almost $200.

We were part of the huge lobbying effort to get our representatives in Albany to realize this tax was misguided. We fully understand the dire situation with our state’s budget, which is a supporting factor in our position to keep the tax as is… we don’t need the unemployment this increase will generate. While the efforts paid off insofar as the tax was originally proposed at 90%, we failed to get them to see the error in their logic.

The tobacco tax crusade doesn’t stop there. Cigarettes will go up $1.60 per pack (for a total cost of $9.20 per pack on average), and the state is even going after soveringn Indian territories, trying to impose a state tax on what are normally tax-free tobacco products sold to tourists.

For cigar smokers, we see the clear line between a cigarette-smoking tobacco addict and someone who enjoys a cigar here and there. Unfortunately, we’re all getting lumped into the same category and taxed to the hilt.

I’m trying to find the silver lining… perhaps the higher cost of cigars will make us appreciate them more? And we can sit back and think about how our cigars are saving the entire state from bankruptcy?

Ugh. Politics.