Ohio Senate Moving Forward With Proposed Budget, Capped Cigar Tax Change (Update)

Last night, the Ohio Senate Finance Committee passed an over 4,000-page version of the proposed two-year $71.3 billion operating budget, which would change the price of cigars in the state.

Included in that version is an additional 5.5 percent tax on cigars, which would be 22.5 percent of the wholesale price instead of the current 17 percent. A 50-cent per cigar cap was included for premium cigars, which would mean the proposed changes would likely not raise prices on cigars with a suggested retail price over $4.50. Most cigars would likely see a decrease in the price at the counter. A cigar with a suggested retail price of $9.50 likely retails for around $11.64 currently in Ohio, it would be closer to $11.12 after the tax change.

The change would only apply to “premium cigars” those which weigh more than 6 pounds per 1,000.

The Ohio Senate passed the budget on Thursday.

Despite this, the overall taxes to other tobacco products could change. An official at the International Premium Cigar & Pipe Retailers Association told halfwheel that the organization expects the Ohio House of Representatives to be more favorable to defining what is a “premium cigar” and on any change to other tobacco products, which includes cigars and pipes.

The budget proposal includes a laundry list of changes, including an increase in the cigarette tax from $1.25 to $1.65 per pack.

Update (June 21, 2015) — The Ohio Senate formally approved the budget. Added more clarification.

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.