A bill in Montana to increase the tax on tobacco products will get its first hearing today after having been in the works since early November.
S.B. 354, authored by Sen. Mary Caffero, D-Helena, 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.
The bill is also seeking the same increase for other tobacco products besides cigarettes and moist snuff; cigarettes would see 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.
It would also redefine the term tobacco products to include electronic devices such as e-cigarettes and vape pens.
Funds raised from the increase would be directed to a number of areas, including state veterans’ nursing homes, the state general fund, and health and medicaid initiatives.
It is scheduled for a hearing by the Senate Committee on Taxation today at 9 am local time. Should the bill end up passing the legislature and be signed into law, the tax increases would go into effect on April 30, 2017.
Update (March 28, 2017) — The bill passed the committee by a 9-3 vote today and will now head to the Senate floor for a full vote. A date for that vote has not yet been announced.
This story was originally published on March 27, 2017.