The Michigan Legislature approved Senate Bill 1004, a piece of legislation that would put into place a 50-cent cigar tax on November 1st. The bill now heads to Gov. Rick Snyder’s desk for his signature.
In a news release, the International Premium Cigar & Pipe Retailers cited “diligent, long work and effort” by a group that included the Michigan Premium Cigar Retailers Association, Cigar Rights of America and the IPCPR’s state lobby team as being key to getting the legislation passed. The group had a series of negotiations with the Governor’s office and the state’s treasury department in an effort to craft a piece of legislation that was fair to both retailer and government.
Michigan’s current cigar tax is 32% of the wholesale price, meaning that if a cigar was sold from a manufacturer to a retailer for $5, the cigar would bear a tax of $1.60. This should mean that the cost of nearly every cigar sold in premium tobacconists will go down significantly once the legislation takes effect.
Michigan becomes the seventh state in the U.S. to cap the excise tax applied to cigars, joining Oregon, Washington, Rhode Island, Wiconsin, Iowa, Connecticut, and Vermont.