New Hampshire Bill Seeks to Add Taxes for Premium Cigars

There are four places in America where cigars are sold without any state tobacco taxes: Florida, New Hampshire, Pennsylvania and Washington, D.C. A bill recently introduced in the New Hampshire House of Representatives could reduce that number to three.

Earlier this week, Rep. Timothy Horrigan, D-Strafford, introduced H.B. 510, which would remove the current tobacco tax exemption for premium cigars and subject cigars to the state’s 65.03 percent tax on the wholesale prices of other tobacco products. This would take New Hampshire’s cigar tax rate from the lowest in the nation to the fourth highest. Because New Hampshire has no sales tax, unless a retailer in another state discounts a product, customers in New Hampshire pay the absolute lowest price for cigars in the U.S.

In New Hampshire, cigars should be sold at the manufacturer’s suggested retail price unless the retailer makes other adjustments. If H.B. 510 took effect, a cigar that has an MSRP of $9.50—and as such, is currently sold for $9.50 in New Hampshire—would be $15.68 using industry-standard margins.

The good news for cigar smokers is that this is not the first time Horrigan has tried to do this. He introduced similar legislation in 2019; that bill died following a 16-3 vote against the proposed legislation in the House Ways & Means Committee.

Despite its small size and cold winters, New Hampshire is one of the most important states for the cigar industry. Because of the lack of taxes and generally pro-business climate, New Hampshire is not only a shopping destination for many in New England but also a popular place to operate a cigar store and many prominent stores in New England have relocated to New Hampshire. Most recently, the Owl Shop, which operated for 76 years in Worcester, Mass., announced last year it was moving to New Hampshire.