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Politics and opinions aside, does anyone know of any more up to date info (than the link below) on the status of if/when the SCHIP tax will be put into effect and how much it will be? I read not too long ago that the tax might be as high as 40-45% per cigar. Something like that might kick me out of the game just as I am getting started. Now this article is saying it will probably be something more like a few cents to a dollar per cigar.
http://www.stogieguys.com/2009/01/01...-increase.html
If you read the update on that link it lists the following:
Quote:
SCHIP Legislation Details
The new tax rates are effective April 1, 2009;
The cigarette tax rate goes from $.39 per pack to $1.00 per pack;
The tax on snuff goes from $.585 per pound to $1.50 per pound;
The tax on pipe tobacco goes from $1.0969 per pound to $2.8126 per pound;
The tax on RYO goes from $1.0969 per pound to $24.62 per pound (not a typo).
Additionally the definition of RYO has been expanded to include cigar wrappers to address the “blunt wraps” issue;
The tax change to small cigars (cigars weighing less the three (3) pounds per thousand will be phased in over five (5) years at the following rates per year:
2009 & 2010 - $.25 per pack
2011 & 2012 - $.50 per pack
2013 & 2014 - $.75 per pack
2015 and beyond - $1.00 per pack
We were successful in continuing to have the floor tax NOT apply to large cigars; however it does pertain to any other tobacco products.
Oh geez. I didnt even see that.
Another probably dumb question. What is considered a cigar "pack"? Also, what if I go to my tobacconist and buy just a single cigar? How is that taxed? As someone once told me "explain it to me like I am a five year old".
Quote:
Originally Posted by sushiboy
The cigar packs referred to above would be tins of cigarillos etc. (assuming said smokes meet the weight requirement posted).Quote:
The tax change to small cigars (cigars weighing less the three (3) pounds per thousand will be phased in over five (5) years at the following rates per year:
2009 & 2010 - $.25 per pack
2011 & 2012 - $.50 per pack
2013 & 2014 - $.75 per pack
2015 and beyond - $1.00 per pack
A single cigar would only have state tobacco and sales tax applied. Not the federal tax being talked about here.Quote:
We were successful in continuing to have the floor tax NOT apply to large cigars; however it does pertain to any other tobacco products.
The only people this change really hurt are the RYO (roll your own) smokers. They are being hit with a 2000% tax increase.:smiley11:
*disclaimer* All thoughts, opinions, idoms, hyperbolies, and small woodland creatures are the direct result of a newbie with a search function and should be treated as such *end disclaimer*
Going by the poundage definition, I'd say they're talking about Swisher sweets, El productos, White Owls. etc. (not a 5 pack of Gurkas)
Will
As it sits you are looking at a federal tax of 40-41 cents per large cigar. Thats up from about 5 cent currently issued. It will effect boxes by about 8 dolloars per box. Really no big deal..... BUT, its a foot in the door for the government. April, 1 2009is projected start date.
Its the machine made / small cigars and cigarette tobacco people that are going to get hammered percentage wise.
The floor tax is a tax applied to all inventory on the floor at the time the tax goes into effect. This will not apply to "large" cigars, but would apply to everything else.
JR Cigars was having a big sale because of this SCHIP Legislation with some pretty good deals last time I checked.
ok, i now understand. thanks! :smiley20:
About seventy cents more for a normal-sized premium hand-rolled long-filler cigar.Quote:
Originally Posted by sushiboy
Straight from the IPCPR who have been fighting the SCHIP for quite some time
Congress has introduced the reauthorization of the SCHIP bill--HR2. The cigar tax proposal is as follows:
52.4 percent on large cigars (most premium cigars follow under this federal classification) with a cap of no more than 40 (forty) cents per cigar. This is far lower than the original proposal from the Senate of $10 per cigar and $3 proposed by the House.
This has been a long, tough fight for all of us, and considering we are still being hit with a tax increase on cigars, our industry feels the proposed 40-cent maximum (cap) is sustainable and certainly better than the original proposals.
We expect HR2 to move smoothly through Congress and will not face defeating oppositon. As more news develops we will continue to keep you informed.