A pair of Hawaii state legislators are hoping to give cigar smokers in the state a bit of financial relief at the cash register by placing a cap on the state’s cigar tax.
This week, HB 331 was introduced into House by Rep. Nadine K. Nakamura, D-14, while Sen. Ronald D. Kouchi, D-8, introduced SB 222 to the Senate. Both bills would limit the amount of tax charged on cigars to 50 cents per stick.
Currently, Hawaii charges a tax on cigars at 50 percent of the wholesale price, which means that a cigar with an MSRP of $9.50 ends up costing $14.25 before any sales tax is added. Should the 50-cent cap pass, that price would go down to $10.50, by halfwheel estimates.
A similar attempt to cap the cigar tax was attempted in 2016, with a bill passing the Senate but never coming up for a vote in the House. Last year, a pair of bills were introduced that sought to increase the tax from 50 percent to 70 percent of the wholesale price, though those never made it out of committee hearings and were eventually deferred.
The House bill has been referred to the Consumer Protection & Commerce Committee as well as the Finance Committee, while the Senate version is awaiting assignment to a committee. Should the legislation be enacted into law, the cap would go into effect on July 1.