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The vast selection at Havana Cigars in Anthem could be in for an substantial price increase if Congress has its way. A new proposed federal tax on cigarettes and cigars could raise the tax on a single cigar by as much as $10 apiece.
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Proposed stogie tax: up to $10 per cigar
Tobacco shop owners, cigar lovers outraged
by Jim Crawford

Cigarette smokers have felt the heat for their habit in the past few years with an increase in taxes, a ban on smoking in restaurants, bars, public buildings and an ongoing verbal war between smokers and non‑smokers.

Now, in order to raise tax revenue, Uncle Sam is turning his attention to the next target on the tobacco chain–cigars.

Congress says it needs between $35 billion and $50 billion to fund the State Children’s Health Insurance Program and tobacco products are a good source of revenue.

If passed, federal taxes on a pack of cigarettes would jump from 39 cents to $1 under proposed legislation, with cigars also caught in the mix.

The new bill proposes that the federal tax on all large cigars, which are usually purchased individually, would rise to 53 percent. The current tax cap stands at 4.8 cents per cigar, with the exception of very small cigars sold in packs like cigarettes.

State tax on cigarettes in Arizona is $2 a pack, unless sold on an Indian reservation. Small cigars sold in packs of 20 are taxed at 44.1 cents.

Under another version of the federal bill, the Senate Finance Committee is looking at setting a maximum tax of $10 per cigar.

“That would literally kill every retailer there is,” said Tim Charnock, owner of Cave Creek Cigars. “At $10 apiece, nobody would be smoking them. I think the black market would do great business. We’re so close to Mexico, I think people would take day trips to get what they need.

“I don’t really think it’ll pass. Keep your fingers crossed. I heard where they’re proposing a 20,000 percent increase. That’s a big increase even for our government. Most little stores like mine will just have to close.”

Sam Sweiss at Maduro Cigar Emporium in Carefree related he was advised by officials in the cigar industry to contact legislators and voice his complaint.

“They said to call (John) Kyl and (John) McCain,” Sweiss said. “We called them and left a message. The tax would kill the whole cigar industry, not just the retailers. Hopefully, they’ll compromise–maybe a 10 percent raise in taxes instead of 50 percent. It’s too early to tell.”

Bobby Chadha, owner of Havana Cigars in Anthem, said the person who introduced the bill should be penalized for disrupting normal business.

“Who introduced this? Don’t they have anything better to do?” asked Chadha. “Is it because they’re nonsmokers? They’re making us (cigar lovers) the scapegoats to raise money. Why are they discriminating against us? If they’re going to raise taxes, they should make it standard.”

Chadha went on to say, “What am I going to tell the guy who comes in and buys a $10 cigar this month and next month I have to tell him it’s $20? I’m probably not going to survive. I only opened three months ago, and I’d rather donate my business than pay those kinds of taxes the rest of my life. What kind of message are they trying to send?”

Calls by The Desert Advocate to Sens. McCain and Kyl seeking comment on the proposed legislation were not returned.

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