Pennsylvania Governor’s Budget Defeated, Massive Cigar Tax Avoided (Update)

On Monday, cigar smokers around the U.S. got a big win as the budget of Gov. Tom Wolf (D) was defeated in Pennsylvania.

That budget included the introduction of a new tax on cigars at a rate of 40 percent of the wholesale price. Currently, Pennsylvania—along with Florida, New Hampshire and Washington D.C.—has no added state excise tax on cigars. That has created a friendly environment for cigars, which is why major catalog retailers like Atlantic Cigar, Cigars International, Famous Smoke Shop and Holt’s are all located in Pennsylvania.

Wolf’s budget was defeated 193-0 after Republicans proposed a tax amendment that Democrats rejected.

While the proposed budget was defeated, that doesn’t mean the cigar tax is dead. There is a tentative June 30 deadline for next year’s budget, but the International Premium Cigar & Pipe Retailers Association (IPCPR) told its members that negations will continue beyond the June 30 deadline and a cigar tax is still being considered.

Update (June 4, 2015) — Added statement from the IPCPR, clarification.