The battle over Michigan’s 50-cent cap on the cigar tax will add a new chapter this legislation as five senators have introduced a bill to permanently extend it, fresh off the former governor’s veto of a similar proposal last year.
Currently, the cap is set to sunset on Oct. 31, 2021, which would return the tax rate to 32 percent of the wholesale price. In terms of what that means at the register, a cigar with an MSRP of $9.50 costs around $10.50 with the cap, while that same cigar would cost $12.54 by halfwheel’s estimate.
S.B. 58 seeks to avoid that increase by removing the sunset date and extending the cap indefinitely. The bill is authored by Jim Runestad, R-15, and has gained four co-sponsors so far: Sens. Tom Barrett, R-24; Peter Lucido, R-8; Dale Zorn, R-17; and Michael MacDonald, R-10.
The bill has been referred to the Senate Committee on Finance where it is awaiting a hearing. Should it pass, it will meet a new governor, as Gov. Rick Snyder left office at the end of 2018 after hitting the state’s two-term limit. He has been succeeded by Gretchen Whitmer, a Democrat who has served several terms in both the House and Senate and won the November 2018 election with 53.34 percent of the vote.