Earlier today, New York Mayor Bill de Blasio signed a variety of anti-tobacco bills including one that will raise the price of cigars in New York City.
It’s somewhat of a complex scenario, but smokers should expect to pay 80 cents extra per cigar. The new law requires that no cigar be sold for under $8 in New York City and that a 10 percent tax of the price floor, i.e. 80 cents, be paid.
That changes a bit for cigars sold in boxes, where the first cigar is charged 80 cents and then each cigar thereafter is 17.5 cents. That means a box of 25 would be charged $5.
Cigars sold in boxes are subject to a price floor of $1.75 per cigar plus $6, meaning a box of 25 cannot be sold below $49.75.
The taxes collected will fund public housing.
Per halfwheel estimates, any cigar with an MSRP of under $4.99 will have its price artificially increased due to $8 price floor. There’s a chance that this would be an increased price range if the retailer chooses not to add the 80 cent tax to part of its wholesale margin base.
A cigar with a $9.50 MSRP is now likely to retail for $13.81 before sales tax.
The floor price and accompanying tax will not apply to cigars sold at retailers, but shipped to individuals outside the city.
de Blasio also signed new rules regarding the retail tobacco licenses. The new rule caps the number of licenses at 50 percent of whatever they currently are, meaning no new licenses will be issued until the number drops at least one below half of what they are now.
The cost of an all tobacco license will increase from $110 to $200 charged biennially.
Smoking will be prohibited in common areas and all buildings with three or more units will be required to having a smoking disclosure policy.
Finally, pharmacies will no longer be able to sell tobacco products. There are more than 550 pharmacies in the city that currently do so. This will be phased out as their biennial tobacco license expires and is up for renewal, beginning next year.