Nevada Passes 50 Cents Tax Cap for Premium Cigars

The cost of most premium cigars in Nevada is set to go down thanks to a new law that will limit the amount of tobacco taxes assessed to premium cigars.

Yesterday, the Nevada Senate approved A.B. 232 by a vote of 18-3. Earlier this month, the bill passed the Nevada Assembly, meaning it now heads to Gov. Joe Lombardo to be signed into law. The bill would modify Nevada’s existing tobacco tax law, which charges a state tax of each cigar 30 percent of its wholesale price. A.B. 232 adds new language that would limit the amount of taxes a premium cigar could pay to no more than 50 cents.

A cigar with an MSRP of $9.50 likely pays $1.43 in tobacco taxes.  Under A.B. 232, that amount would be reduced to 50 cents. If the bill were to pass, consumers could see savings between 93 cents and $1.85 for a cigar with an MSRP of $9.50 depending on how retailers calculate their margins. The savings would be more significant the more expensive a cigar is; the tax cap would not affect cigars with MSRPs below $3.34.

A.B. 232 defines a “premium cigar” as “a cigar that is rolled by hand, has a wrapper made of whole tobacco leaves and does not have a filter or mouthpiece.” This is a broader definition than the one oftentimes referenced and would mean that large flavored cigars like ACID and Tatiana would be eligible for the tax cap, as would many of the cigars that J.C. Newman makes at its El Reloj factory in Tampa, which the company describes as being made by vintage machines.

If passed, the law is set to go into effect on July 1, 2023.

Charlie Minato

I am an editor and co-founder of halfwheel.com/Rueda Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I have written about the cigar industry for more than a decade, covering everything from product launches to regulation to M&A. In addition, I handle a lot of the behind-the-scenes stuff here at halfwheel. I enjoy playing tennis, watching boxing, falling asleep to the Le Mans 24, wearing sweatshirts year-round and eating gyros. echte liebe.