Connecticut Budget Could Increase Cigar Tax Cap

Earlier this year, Gov. Dannel P. Malloy released his proposed budget for FY2019. In it was a measure that would increase the state’s tax cap on cigars from 50 cents to $1.50.

Now his budget is moving through the legislative process.

Last week, the Joint Committee on Finance, Revenue and Bonding gave the proposal a favorable recommendation and referred it to the Legislative Commissioners’ Office.

Cigars are taxed at 50 percent of their wholesale price, though capped at 50 cents. This means that virtually every large cigar is taxed at 50 cents because their wholesale price likely exceeds $1. Malloy’s proposal is likely to raise cigar prices as much as $2 due to the way cigars are sold.