Proposed Wyoming Cigar Tax Cap Removed From Bill

Last month, the Wyoming Senate passed SF0042, which would have introduced a 30 cents per cigar cap on the tobacco taxes charged in Wyoming. The bill was sent to the Wyoming House of Representatives Revenue Committee, where the cap was removed as part of a series of amendments.

The current proposal, now on its way to the House Appropriations Committee, would reduce the tax rate on premium cigars from 20 percent of the wholesale price to 10 percent of the wholesale price. While this would be a win for cigar smokers and retailers in Wyoming, it’s probably not as good as the previously-proposed 30-cent tax cap.

Technically, the 30-cent cap would have left the 20 percent wholesale tax in place, but it would have been capped at 30 cents. This means that any cigar with an MSRP of more than $3 would pay 30 cents, while cigars under $3 would pay less than 30 cents.

halfwheel has estimated what consumers are likely paying or what they might expect to pay for a cigar under different proposed scenarios:

• MSRP: $9.50 (before sales tax)
• Current Wyoming Price: $11.40
• Wyoming Price With 30-Cent Cap — $10.10
• Wyoming Price With 10 Percent Tax — $10.45

While most cigars would be cheaper with the 30-cent cap versus a 10 percent wholesale if a cigar has an MSRP of $6 it will likely be less expensive for Wyoming consumers with the current proposal versus the 30-cent cap.

The change would only apply to “premium cigars,” which are defined as cigars that have a whole leaf wrapper, are rolled by hand, and do not have a filter or non-tobacco tip.

According to Wyoming Public Radio, Rep. Dan Zwonitzer, R-Cheyenne, pushed for the change because he argued that Wyoming typically uses percentages and not dollar amounts for taxes.

Because the bill has been amended, if it passes the Wyoming House, it will need to go back to the Wyoming Senate before it can be signed by Gov. Mark Gordon.