The state best known for its sinful city and expansive natural landscapes is easing the wallets of local Nevada is set to join a handful of other states that have instituted a tax cap on cigars as Gov. In August, Lombardo signed AB 232 into law that will limit premium smoke sales by 50 cents. This law will take effect on July 1, 2023.
In Nevada, premium cigars are taxed at 30 percent. The average retail price of cigars is roughly double the wholesale price, giving a $10 cigar a tax of $1.50, a $15 cigar a tax of $2.25, and a $20 cigar a tax of $3. Those types of cigars will receive tax breaks of $1 to $2.50 in the next few days.
The bill was introduced in March by Assemblymen Brian Hibbetts (R) and Duy Nguyen (D). It passed 35-7 in the Nevada Assembly in late May, then 18-3 in the Senate a week later.
Glynn Loope, PCA director of state advocacy, credited Nevada tobacco shop owners for their support and passage of the bill. “Nevada’s community tobacconists made the case in a way that sets a national example,” said Loope. “They built a bipartisan coalition of legislative support, made the case that the tax cap is a small business issue that will improve their competitive position, and discussed the impact of the tax cap at hearings on women- and minority-owned small businesses.”
In addition to Nevada lobbyist Mike Sullivan of The Ferraro Group and prominent Nevada shop owner Michael Frey, Loope also lauds Jason Samuelson of Cigar Box, Michelle Runles of Tap N Ash Social Club, Shar Broumand of En Fuego Cigars and Lounge, and Brad Mark of SMōK Cigar Lounge.
This marks the third such a time a cigar tax cap bill has been passed in the U.S. This calendar year. Idaho set a 50-cent cap back in April, followed by Montana in May, who cut their tax threshold to 35 cents a stick. A similar tax cap proposal has been introduced into the legislatures of several other states recently, and Nevada’s recent action only strengthens their prospects.