Cigar Tax Cap Language Introduced in Virginia

As the Virginia General Assembly debates its upcoming budget, language has been included that could help to lower the prices of cigars.

If passed, the new language would modify Virginia’s current state tax rate for cigars from 20 percent to 20 percent but with a cap of 30 cents per cigar. Currently, a cigar with an MSRP of $9.50 likely retails for around $10.20 in Virginia; with the tax cap, that cigar would decrease in price to just $9.80 before local taxes.

Any cigar with an MSRP of $3.10 or more would likely benefit from the tax cap and the more expensive the cigar, the larger the benefit would be. For example, a $16 cigar likely retails for around $17.60 before sales tax, which would be reduced to around $16.30.

Rep. David Reid, D-Ashburn, and Sen. David Marsden, D-Burke, introduced the language into H.B. 30 and S.B. 30, the two bills related to Virginia’s budget.

The Premium Cigar Association, an industry trade group, has set up a form for Virginia residents to contact their local assembly members in support of this change.

Charlie Minato

I am an editor and co-founder of halfwheel.com/Rueda Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I have written about the cigar industry for more than a decade, covering everything from product launches to regulation to M&A. In addition, I handle a lot of the behind-the-scenes stuff here at halfwheel. I enjoy playing tennis, watching boxing, falling asleep to the Le Mans 24, wearing sweatshirts year-round and eating gyros. echte liebe.