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Panel adopts temporary per-stick rate for premium cigars to try to boost in-state sales
Summary
The House Ways and Means Committee adopted an amendment and reported House Bill 325, which sets a temporary 50¢ per-stick excise rate for higher-priced cigars for two years beginning Jan. 1, 2026, reverting to the current invoice-based 20% structure in 2028 unless the Legislature acts again.
House Bill 325, sponsored by Representative Bryant, was reported with amendments after committee members adopted an amendment that changes excise taxation for certain cigars. The bill temporarily replaces the present 20% excise (based on manufacturer invoice price for premium cigars invoiced at $120 per thousand or more) with a 50¢ per-stick excise rate for a two-year trial period beginning January 1, 2026; the bill would revert to the current percentage-based structure on January 1, 2028 unless reauthorized.
Sponsor testimony framed the change as a pro–‘‘Main Street’’/small-business measure: Louisiana brick-and-mortar cigar shops argue they are losing sales to out-of-state or online retailers that do not collect the excise and are undercutting local shops. Supporters said a per-stick rate would make state cigar shops more competitive with neighboring Texas and Florida, and could grow local economic activity and sales tax collections if purchases return to in-state retailers.
Staff and members noted the fiscal uncertainty: because Louisiana has not previously taxed cigars per stick, the fiscal office had to estimate impacts, and the committee used a conservative modeled revenue figure (the committee's fiscal note showed a potential reduction of roughly $10 million statewide in the near term, while noting uncertainty). Sponsor said the trial period is intended to generate empirical sales data; if in-state sales increase, the state could recover revenue through growth and additional local sales taxes.
The committee reported HB 325 with amendments and requested follow-up analysis; sponsors said they will continue to work with retailers and tax administrators on implementation details.
