New York City Could Enact Tobacco Tax Increase, Price Floors (Update)

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Smokers in New York City could soon be looking at a significant increase of tobacco products if a proposal scheduled to go before the New York City Council today gets approved.

Int. No. 1544-B was introduced back in April, but the proposal underwent an amendment during its hearing by the council’s Committee on Health yesterday that makes the taxes even more punishing.

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Passed 7-0 with two members absent, the bill would establish a price floor of $8 per cigar when sold individually, a minimum that must be established before OTP and sales taxes are added. For box sales, the price floor would be established by multiplying the number of cigars in the box by $1.75, and then adding $6.25.

It would also establish a new excise tax of 10 percent of the price floor, or 80 cents per stick when sold individually. For a box purchase, the tax would be 80 cents for the first cigar, and then 17.5 for each additional cigar. In effect, it would make the minimum price of a cigar sold in New York City $8.80, and that’s before the state’s effective tax rate of 28.5 percent of the wholesale price.

The bill would also increase the minimum price on a pack of cigarettes cigarettes while establishing price floors and raising the taxes on little cigars, smokeless tobacco, suns, shisha and loose tobacco.

Funds raised from the increase would be directed to the New York City Housing Authority, which oversees the city’s public housing.

The city council meets today at 1:30 pm ET, and while the agenda was not available at time of publication, it is possible that the tobacco tax increase could be up for a vote. Should the bill pass the full council, it would go into effect approximately nine months after signed by Mayor Bill de Blasio, who has been vocal in his support of the increase.

The New York City Council approved this proposal today by a 33-9 vote along with a number of other anti-tobacco regulations, including a prohibition on the sale of all tobacco products in pharmacies; a cap on the number of tobacco retailers in the city and a move to cut the number in half through attrition; a requirement for a retail license to sell electronic cigarettes and cap e-cigarette licenses in a similar way to other tobacco licenses; an increase in the fee for tobacco retail licenses; and a requirement for residential buildings to establish smoking policies and disclose them to both current and prospective residents.

Featured image by Francisco Diez from New Jersey, USA (Times Square, NYC) [CC BY 2.0], via Wikimedia Commons

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Patrick Lagreid
About the author

I strive to capture the essence of a cigar and the people behind them in my work – every cigar you light up is the culmination of the work of countless people and often represents generations of struggle and stories. For me, it’s about so much more than the cigar – it’s about the story behind it, the experience of enjoying the work of artisans and the way that a good cigar can bring people together. In addition to my work with halfwheel, I’m the public address announcer for the Colorado Rockies and Arizona Diamondbacks during spring training, as well as for the Salt River Rafters of the Arizona Fall League, the WNBA's Phoenix Mercury and the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for MLB.com, plus I'm a voice over artist. I previously covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.

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