April 15, 2009 - Seventy percent of the cigars sold in the United States are either made in, imported to or sold in Florida.
Tampa's cigar makers and retailers are fuming over a proposal to increase the state's tobacco tax, saying the added cost could snuff out the business they had built up over the past 120 years. The Florida Senate has proposed a bill that would increase taxes on cigarettes ($1.00 per pack) and impose what could be the first tax on cigars made and sold in the state. The Senate is proposing a tax on cigars at the rate of $1 per ounce.
Including the federal tax hike, the cost of the 369 million large cigars expected to be sold in Florida next year would go up 16 percent, from an average of $3.41 to $3.97 each. The 409 million small cigars sold in packs would go from an average of $3.69 to $5.66, up 53 percent.
A tobacco tax to help finance the state's budget could exclude cigars, as lawmakers try to iron out their financial differences before the May 1 end of the legislative session.
The increased tobacco tax has strong bipartisan support in the Senate but resistance is much higher in the Florida House. The House hasn't heard the tax bill and has no tobacco-tax money in its proposed budget. House Republican leaders have so far refused to hold a hearing on it, and plan to pass a budget next week that cuts spending by $500 million and imposes higher "user fees" on drivers, court cases, prisoners, fishers and others.
Senate plans to press ahead, arguing the money is needed to balance its proposed $65 billion-plus budget. "We feel real strongly about the tobacco surcharge," said J.D. Alexander, R- Lake Wales, Senate Ways and Means chairman.
House Finance and Tax Chair Ellyn Bogdanoff, R- Fort Lauderdale: "It's just easy. If you don't smoke, you don't care," said of the tobacco tax, which she has refused to hear in her committee. "But it's still a tax, and it sets the standard that every time the state gets in trouble, it's not going to clean up its own house. It's going to go to the people for more taxes. And there's no guarantee that Gov. Charlie Crist — who so far has offered no support for the tax hike — won't try to veto it if it passes.
Related news brief: Florida - besides tobacco tax increase Senate wants to restrict tax-free sales..; Florida Senate panel backs tobacco tax hike..; Florida tobacco tax hike gets 1st critical vote today.., Tobacco Free Florida Week - 2/27/2009 - 3/7/2009.., Florida's $2.3 billion deficit - increase tax on cigarettes???; States Need Quick Influx of Revenue – Think Tobacco Tax..; Times are Tough Save Money Quit Smoking...
Reference: State tobacco tax ignites a clash in Tallahassee by Aaron Deslatte | Tallahassee Bureau, Orlando Sentinel, 4/11/2009; Cigar makers fired up by tobacco taxes by KEITH MORELLI, The Tampa Tribune, 4/14/2009; Cigar makers rally to head off tax by Keith Morelli
Tampa Tribune - McClatchy-Tribune Information Services via COMTEX, 4/15/2009.