Bill Would Cap New Jersey’s Cigar Tax at 50 Cents

A new bill introduced in the New Jersey Assembly could substantially lower the tax on cigars in the state.

Rep. Brian Bergen, R-Denville, has introduced A.B. 4936 which would introduce a tax cap of 50 cents per cigar for cigars sold in the state of New Jersey. This would keep New Jersey’s current tax rate of 30 percent of the wholesale price but would limit the total tax to no more than 50 cents per cigar.

It likely wouldn’t affect the price of cigars that have an MSRP of $3.34 or less because those cigars pay 50 cents or less in tax. But, for every other cigar—the vast majority of the cigars sold in the U.S.—there would be savings.

In New Jersey, a cigar with an MSRP of $9.50 likely costs around $12.35 before sales tax. That would change to $10.50 if A.B. 4936 is enacted.

The more expensive the cigar, the better the savings will be. A cigar with an MSRP of $15 will likely be reduced by $3.50 in retail price, while a cigar that has an MSRP of $20—which likely retails for around $26 in New Jersey—would cost $21 if the bill is passed.

A.B. 4936 currently has 11 total sponsors.