Cost of premium cigars would drop with tax cut

BOISE – The average smoker of premium cigars may be able to pay any tax Idaho requires. But whether those smokers are willing to ante up is another story, lawmakers were told Monday.

“The average consumer of premium cigars is a discriminating and astute consumer,” said Russell Westerberg, lobbyist for the Cigar Association of America. “He didn’t earn the ability to enjoy certain luxuries in life by being a foolish consumer and paying more than necessary for products of his choosing.”

HB693, approved 13-4 Monday by the House Revenue and Taxation Committee and backed by Rep. Jim Clark, R-Hayden Lake, sets the tax on premium cigars at 50 cents each. The tax now is 40 percent of the wholesale price.

Under the current system, a $75 box of premium cigars is taxed $30. That would drop to $12.50 under the new law, which Clark – not a cigar smoker himself – said is much more in sync with prices in Oregon and Washington and on the Internet.

Mark Sturman, owner of Sturman’s Smoke Shop in Boise, said he’s in danger of going out of business because Idaho cigar smokers won’t pay the high taxes.

“My business is going to live or die by this bill,” he said. Sturman had two bags of tobacco and one box of premium cigars with him. The bags are taxed $5 and $6, whereas the $225 box of cigars is taxed $90.

“There are only a handful of cigar stores left in the state of Idaho. This is why,” he said.

Reducing taxes on premium cigars isn’t about making it cheaper for people to smoke them, Clark said. It’s about helping the few independent cigar stores that remain in Idaho compete in an increasingly global market.

“Let’s try for once to take care of the small mom-and-pop operation,” Clark said.

The bill now goes to the full House.