Legislators in Hawaii will once again take up the issue of reducing the tax on premium cigars, as a trio of legislators are once again seeking a change to the lesser of 50 cents per cigar or 50 percent of the wholesale price.
State representatives Joseph M. Souki, D-8; Derek S.K. Kawakami, D-14; and Dee Morikawa, D-16, have introduced HB 1634 to the legislature for consideration. It has since been referred to the Hawaii House Committees on Consumer Protection & Commerce as well as Finance, while its Senate companion bill, SB 2135 was referred to the Senate Ways and Means Committee.
Currently, large cigars are taxed at a rate of 50 percent of the wholesale price. Should the proposal pass, a cigar with a suggested retail price of $9.50 would go from costing $14.25 to $10.50 by halfwheel estimates. The bill seeks a start date of July 1 on the reduction.
In both 2013 and 2014, a similar proposal was introduced, though it never made it out of the Hawaii House Ways and Means Committee.
Another bill, SB 2692, has been introduced and seeks to increase the excise tax in OTP other than large cigars from 70 to 80 percent of the wholesale price.