A bill in the Nebraska Legislature is seeking to more than triple the state’s tobacco tax—including the one levied on cigars—from 20 percent of the wholesale price to 65 percent of the wholesale price.
That means that a cigar with an MSRP of $9.50 would jump from $11.40 at the register to $15.68, by halfwheel estimates.
The bill, L.B. 710, is sponsored by Sen. Machaela Cavanaugh. It would also raise the tax on a pack of cigarettes from 64 cents per pack of 20 to $2.14, as well as establishing a tax on electronic cigarettes and related products, which would also be set at 65 percent of the wholesale price. Money raised from the increased tax rate would be used to establish the Behavioral Health Provider Rate Stabilization Fund, which is being created to support reimbursement of behavioral health services providers, as well as leverage federal funds for behavioral health services provider rate reimbursement.
It is slated to gets its first hearing on Thursday in the Legislature’s Revenue Committee. The bill contains an emergency clause, so should it pass through the legislative process and get the governor’s signature, it would go into effect immediately.
While L.B. 710 is seeking to raise the tobacco tax, Sen. Justin Wayne, D-13, is sponsoring L.B. 429, a bill that would cap the state’s tobacco tax at 50-cents per cigar. That means that a cigar with an MSRP of $9.50 that currently sells for $11.40 by halfwheel estimates would drop to $10.50. That bill is currently awaiting further action after being referred to the Revenue Committee in January.