Cigar taxes have been a contested issue in state politics in the last several years, with tax rates on cigars differ considerably from state to state, from as high as 86% in Utah and 75% in New York to 0% in Pennsylvania and Florida.
Two industry advocacy groups, the Premium Cigar Association and the Cigar Association of America, are jointly commissioning the study to evaluate the role of cigar tax caps in state policy and the economic impact cigar sales have on local, state and federal taxes.
Dr. Ernie Goss of Goss & Associates will head the study. Goss is also the chair in Regional Economics at Creighton University.
Industry leaders argue that vastly differing tax caps between states, like those of neighboring New York and Pennsylvania, significantly hinder competition of cigar wholesalers in states with higher tax rates.
Several states, like Virginia and Illinois, have seen increased tax rates for premium cigars in their budgets in recent years.
“Currently, we find ourselves having to defend existing tax caps, as well as working to advance new cap bills,” Cigar Association of America President Scott Pearce said. “And in this regard, research and substantiated data are the number one request of state legislatures.”
Through this new study, the Cigar Association of America and the Premium Cigar Association are seeking to build economist-backed data to support state legislation capping taxes on cigars and ultimately stimulate economic growth in the tobacco industry.
“Having a study produced by an economist of Dr. Goss’s acclaim is a testament to how serious [we] are on this pressing issue,” Premium Cigar Association Executive Director Joshua Habursky said.
A release date for the study has not been announced at the time of publication.
