Cigar Tax Avoided in Pennsylvania Again

The finalized version of the 2016-2017 Pennsylvania budget does not include a tax on cigars.

A legislative source told halfwheel that state leaders agreed to strip a proposed 40 percent tax on cigars from the budget. It’s not all good news for smokers, a 55 cents per ounce tax on all other tobacco products, not including cigars and electric cigarettes, remains in the bill.

Pennsylvania holds unique importance to the cigar industry because it is home to major catalog retailers like Cigars International, Famous Smoke Shop, Holt’s and Atlantic Cigar Co. The reason many of those retailers are based in Pennsylvania is because it, along with Florida, New Hampshire and Washington D.C., have no state excise tax on cigars.

This is hardly the first time a 40 percent tax on cigars has been proposed in Pennsylvania. As the state has dealt with budget shortfalls over the years, some have proposed adding a tax on cigars, a proposal that is consistently meant with arguments about how many potential jobs it could cost the state if the major retailers were to leave.

Update: The bill has been signed into law.

Governor Tom Wolf just signed the revenue package, completing the 2016-17 #PAbudget. pic.twitter.com/7l1bbKcWqn

— Governor Tom Wolf (@GovernorTomWolf) July 13, 2016