During its upcoming legislative session, which begins on Monday, January 9, the Indiana General Assembly will debate a bill seeking to place a 72-cent cap on the tax charged on cigars sold in the state.

Currently, Indiana taxes cigars at a rate of 24 percent of the wholesale price, regardless of wholesale price. SB 86, which has been pre-filed by Sen. Mike Bohacek, R-8, seeks to place a cap on that rate of 72 cents for cigars that have a wholesale price of $3 or more.

In terms of what that means at the register, a cigar with an MSRP of $9.50 would see its price drop from $11.78 to $10.94, by halfwheel estimates, and before any sales or other taxes are added.

Cigars with a wholesale price under $3 would still be taxed at the 24 percent rate.

A similar proposal was proposed during the 2022 session, but ultimately failed after being stripped from a bill that contained a number of changes to the state’s tax structure.

The bill has been referred to the Senate Committee on Tax on Fiscal Policy. If passed, the change would go into effect on Jan. 1, 2024.

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Patrick Lagreid

I strive to capture the essence of a cigar and the people behind them in my work – every cigar you light up is the culmination of the work of countless people and often represents generations of struggle and stories. For me, it’s about so much more than the cigar – it’s about the story behind it, the experience of enjoying the work of artisans and the way that a good cigar can bring people together. In addition to my work with halfwheel, I’m the public address announcer for the Colorado Rockies and Arizona Diamondbacks during spring training, as well as for the Salt River Rafters of the Arizona Fall League, the WNBA's Phoenix Mercury and previously the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for Major League Baseball, plus I'm a voice over artist. Prior to joining halfwheel, I covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.