Cigar Taxes Could be Coming to Pennsylvania

The days of cigars not being assessed an additional tax could be coming to an end in Pennsylvania if a proposal by a group of state senators comes to pass.

The Democratic backed plan would institute an OTP (other tobacco products) tax in the state in 2015 and would be part of ten changes that could generate up to $1.1 billion for the state, according to a report on Watchdog.org. The proposal is also calling for an end to tax breaks for some large companies, expanding Medicaid and ending pension double-dipping for charter schools. The suggestions come in advance of Republican Gov. Tom Corbett’s budget announcement which is scheduled for next week.

The tobacco tax component is said to be capable of bringing in some $38 million, as well as possibly creating savings from health-related expenses.

Pennsylvania, along with Florida and New Hampshire, currently do not impose an additional tax on cigars. Additionally, its taxes on cigarettes and other tobacco products are significantly lower than many of its neighboring states, including New York.

There is also a bill in the Pennsylvania house, HB 926, that calls for an increase on the tobacco tax from zero percent to 25 percent of the wholesale cost. The state is also considering removing exemptions to its Clean Indoor Air Act of 2008, a move that would ban smoking at tobacconists, bars, casinos, private clubs and other places. There are also bills in the house to prohibit smoking in a vehicle when a child is present.