A pair of companion bills have been introduced in the Hawaii state legislature that would provide a good bit of tax relief for cigar smokers through a change in the tobacco tax structure.
HB 1849 and SB 2971 would change the current cigar tax in the state from 50% percent of the wholesale price to the lesser of 50 cents per cigar or 50% of the wholesale price. The change would mean that nearly every premium handmade cigar would be taxed at 50 cents per unit, saving consumers a significant amount of money and directing more money toward in-state retailers.
There was a push to make this change during the 2013 session of the Hawaii legislature with SB 188, but the bill was deferred by the House Health and Economic & Business Development Committees and was carried over to this session. In addition to the tax change, SB188 seeks to change language in the Hawaii Revised Statutes to create a specific definition for premium cigars to keep them from getting lumped together with other tobacco products, which have recently come under intense fire in the state.
The Hawaii Cigar Association has been working with members of both houses to create positive change and relief for cigar smokers through these bills, primarily through cleaning up the language and semantics of existing state statutes and carving out a unique space for premium cigars and the retailers who sell them.
If passed, the tax change would go into effect on July 1, 2014.