The California Department of Tax and Fee Administration (CDTFA) delivered some good news for cigar smokers this week, announcing that the tax rate on premium cigars will be decreasing on July 1.

It’s not a sizable decrease, and it keeps the state with one of the highest cigar tax rates in the country. But on July 1, the tax rate will be decreasing from 61.74 percent of the wholesale price to 56.32 percent.

In real-world terms for a cigar with an MSRP of $9.50, that means the price at the register before sales taxes are added will go from $15.37 to $14.85, by halfwheel estimates. Retailers ultimately determine how they factor in the taxes, so prices may vary a bit by store.

This marks the second straight year that the tax rate has declined, as the rate was at 63.49 percent on July 1, 2021. The rate gets adjusted on an annual basis, as the CDTFA annually determines the tobacco products tax rate, which is equivalent to the combined rate of the taxes imposed on cigarettes. The calculation of the rate is based on the wholesale cigarette prices reported to the CDTFA as of March 1 each year, and is effective during the next fiscal year, which runs from July 1 through June 30. The tobacco products tax rate is calculated by dividing the tax rate imposed on cigarettes by the average wholesale cost of cigarettes.

Cigarette taxes will remain the same, at $0.1434 per cigarette and $2.87 per pack of 20 cigarettes, the same rate that has been in place since April 1, 2017.

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Patrick Lagreid

I strive to capture the essence of a cigar and the people behind them in my work – every cigar you light up is the culmination of the work of countless people and often represents generations of struggle and stories. For me, it’s about so much more than the cigar – it’s about the story behind it, the experience of enjoying the work of artisans and the way that a good cigar can bring people together. In addition to my work with halfwheel, I’m the public address announcer for the Colorado Rockies and Arizona Diamondbacks during spring training, as well as for the Salt River Rafters of the Arizona Fall League, the WNBA's Phoenix Mercury and previously the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for MLB.com, plus I'm a voice over artist. Prior to joining halfwheel, I covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.