Montana’s 35 Cent Premium Cigar Tax Cap Heading to Governor (Update)

Cigar smokers in Montana might soon see a reduction in the prices they pay for cigars.

Update (April 28, 2023) — On April 24, the Montana House approved S.B. 122 by a vote of 70-28 with two abstaining. The bill will head to Gov. Greg Gianforte to be signed into law. 

Earlier today, the Montana Senate passed S.B. 122 by a vote of 39-10, with one member abstaining. The bill establishes a tax cap for “premium cigars” sold in Montana. Currently, all cigars are assessed an excise tax of 50 percent of the wholesale price. S.B. 122 would cap the taxes at no more than 35 cents per cigar.

A cigar with an MSRP of $9.50 is currently assessed around $2.24; if S.B. 122 passes that number would reduce to 35 cents. The more expensive the cigar, the better the savings will be.

“Premium cigar” is defined as a cigar that uses a whole leaf wrapper, is not rolled by a machine, does not contain a tip or mouthpiece and does not have a characterizing flavor other than tobacco.

The bill’s original text would have established a tax cap of 10 cents per cigar and would have applied to all cigars. It was amended in the Montana Senate in March.

This story was originally published on April 3, 2023.