Montana Senate Approves Tobacco Tax Increase

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The Montana State Senate has approved a significant increase to the state’s tobacco tax rate, voting 27-22 in favor of the S.B. 354 on Friday.

The bill, which is being sponsored by Sen. Mary Caffero, D-Helena and has garnered 28 co-sponsors, is seeking an increase in the tax on cigars from 50 percent of the wholesale price to 74 percent. For a premium cigar with an MSRP of $10, the cost at the register would jump from $15 to $17.40 before any sales taxes are added, by halfwheel estimates.

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The new tax rate would also apply to all other tobacco products–which would include electronic devices such as e-cigarettes and vape pens due to a redefinition of the term–with the exception of cigarettes and moist snuff. For cigarettes, the bill seeks an increase in the tax from $1.70 to $3.20 for a pack of 20, while moist snuff would be subject to an increase from 85 cents per 1.2 ounces to a number that would be the greater of 74% of the wholesale price or the tax on each pack of 20 cigarettes per 1.2 ounces of moist snuff.

The bill has already received its first reading in the house and has been scheduled for a hearing by the House Committee on Taxation on April 5. The additional revenue from the increase, should it pass, would be directed to a number of areas, including state veterans’ nursing homes, the state general fund, and health and medicaid initiatives.

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Patrick Lagreid
About the author

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 the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for MLB.com, plus I'm a voice over artist. I previously covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.

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