Iwan Ries & Co. Leads Lawsuit to Block Chicago Tobacco Tax Increase

On Tuesday, a group led by historic Chicago cigar retailer Iwan Ries & Co. filed a legal challenge to the city of Chicago’s pending tobacco tax increase, asserting that the increase is in violation of state law.

The store  is joined by the National Association of Tobacco Outlets (NATO), the Cigar Association of America (CAA), the Illinois Association of Wholesale Distributors, the Illinois Retail Merchants Association, the International Premium Cigar and Pipe Retailers Association (IPCPR), and Arangold Corporation–which is better known as Arango Cigar Co.

According to a statement issued by NATO, the group claims that the new tax on other tobacco products (OTP) is pre-empted by Illinois state law, which says that a home rule charter city can adopt a tax on cigarettes or tobacco products provided that the city adopted such a tax on cigarettes or tobacco products prior to July 1, 1993. The City of Chicago enacted a cigarette tax before July 1, 1993, but not an OTP tax, which in the group’s opinion prevents them from being able to adopt an OTP tax.

The city’s tax increase, set to go into effect on July 1, tacks on 20 cents per large cigar and little cigar, $1.80 per ounce of smokeless tobacco and roll-your-own tobacco, and $0.60 per ounce of pipe tobacco. For premium cigar smokers, that means that a cigar with a suggested retail price of $9.50 will now likely retail for around $12.68 in Chicago based on halfwheel estimates, a figure that includes a total of 10.25 percent in sales taxes, 30 cents to the county and 20 cents to the city.

An emergency motion seeking a preliminary injunction against the Chicago OTP tax is scheduled for today.

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, the G-League's Valley Suns, 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.