A bill introduced into the Iowa Legislature on Wednesday is seeking to not only remove the state’s 50-cent cap on the cigar tax, but increase the rate from 50 percent to 67 percent of the wholesale price, a change that would have cigars costing drastically more at the register.
Currently, a cigar with an MSRP of $9.50 costs $10.50 by halfwheel estimates. But take away the cap and increase the rate, and that cigar jumps to $15.87, an increase of $5.37. Buy a box of 25 cigars, and the increase is a whopping $134.25.
In addition, HF 364 would increase the tax on cigarettes by $1.50, raising it from $1.36 to $2.86 per pack. Snuff would also be subject to the 67 percent rate, a chance from the current rate of $1.19 per ounce.
The bill was introduced by Rep. Mary Mascher, D-Iowa City. It has been assigned to the House Commerce Committee.