In 2012, the Michigan legislature approved a 50-cent cap on its cigar tax, which had previously been 32% of the wholesale price. But tucked in that legislation was an expiration date of Oct. 31, 2016. This session, the Michigan legislature is debating whether or not to remove that expiration date and let the cap remain in place indefinitely.
SB 476 was introduced last fall by Sen. Wayne Schmidt and progressed quickly through the Michigan State Senate, passing on Dec. 10 with a 38-0 vote.
Now, the proposal heads to the state House of Representatives, where it currently sits with the House Appropriations Committee awaiting a vote after getting its first hearing on Feb. 3.
The difference for cigars smokers would be significant: as it currently stands, a cigar with an MSRP of $9.50 costs $10.50 at the register by halfwheel estimates. Should the cap expire and the rate return to 32% of the wholesale price, that cigar would then cost $12.54, an increase of more than two dollars.