New Hampshire Premium Cigar Tax Bill Dies

An effort to introduce taxes of premium cigars in New Hampshire has died in the legislature.

Last week, the New Hampshire House of Representatives adopted a report of “inexpedient to legislate” for H.B. 510. According to the State of New Hampshire’s website, “a bill is considered killed when the House or Senate votes to adopt the committee report of ‘Inexpedient to legislate.'”

Currently, there are no excise taxes for premium cigars in New Hampshire. H.B. 510 would have removed the state’s existing excise tax exemption for premium cigars and made premium cigars subject to the state’s 65.03 tax on the wholesale price. This would have taken 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.

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.

New Hampshire is one of four places in the U.S. without local cigar taxes; the other three are Florida, Pennsylvania and Washington, D.C.