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Cigar-tax cap fails after floor debate over fiscal impact and timing
Summary
House debated HB358, which would cap the tax on cigars at $0.50 per cigar (capping the current 86% wholesale tax at a 50-cent per-unit maximum). Sponsor argued the change would retain sales in-state and increase revenue; critics cited the bill's fiscal note and asked for more precise fiscal analysis. The bill failed on final vote, 36–38.
Representative Green presented House Bill 358 to cap the tax on cigars at $0.50 per unit while leaving the 86% wholesale rate in statute but imposing a per-unit ceiling for higher-priced premium cigars. Green said the cap aims to prevent loss of sales to neighboring states and Internet retailers and cited Wisconsin’s experience (a 50-cent cap in 2008) as an example of increased revenue in that state.
Floor debate focused heavily on the fiscal note. Representative Green said he requested a dynamic fiscal note that would account for behavior changes and online sales but that the fiscal analyst provided a static estimate (the fiscal note on the floor was cited as $3.1 million). Multiple members pressed the sponsor for hard baseline revenue figures and for clarity on assumptions; the sponsor said the fiscal analyst could not provide a cigar-only subcomponent because cigars are lumped with other tobacco products in current revenue reporting and that industry estimates differed from the fiscal analyst’s assumptions. One critic described postponing large fiscal impacts as poor policy; others urged a second-level analysis before enacting the change.
After a motion to cut off debate passed, summation was offered and the House recorded 36 yes votes and 38 no votes; HB358 failed and will be filed.
