Home Cigar 101 Taxes, Taxes, Taxes!

Taxes, Taxes, Taxes!

Taxes

There’s an old saying, “Only two things are inevitable, Death and Taxes”. I kind of agree about dying, but when it comes to taxes, we’ve all see countless examples of folks successfully evading them.

When a tax is attached to a product such as a sales tax, you must pay it if you’d like to buy it. Let’s forget about where this money ultimately goes because that’s a whole other story! Gas tax, you pay it along with everyone else that has a vehicle to keep it going. I really don’t mind these two taxes because the vast majority of people pay them.

Over the years I spent in the industry it was interesting to watch cigarette and cigar taxes continue to increase across the country. Throughout my travels many people would always ask me why these tax increases always passed on the federal and state levels. The answer is simple. They only piss off a small percentage of voters that smoke. Try passing a $1 tax per six pack of beer and and a huge amount of people across the political spectrum will overwhelmingly reject it. And don’t forget about Political Correctness. Smoking doesn’t fall in that realm either.

While increasing the price of a pack of cigarettes gets noticed, many smokers don’t know that just about every state in the union has some sort of cigar tax which retailers must carry over into their prices. We’re not talking SALES TAX here. We’re talking about a specific, separate state tax on the cigars you buy.

Some states have a percentage base tax on the wholesale price. For example, New Jersey’s is 30%, Massachusetts is 40%, Alaska is 75% and on and on. Other states calculate this tax per cigar. Connecticut charges .50 cents, Arizona charges around .22 cents. It’s not hard to see how this tax effects your overall purchase depending on where you live. If you’re fortunate to reside is states like New Hampshire, Pennsylvania and Florida, they have no cigar tax.

For example, if a wholesale box of 20 cigars cost a Massachusetts retailer $50, he then has to pay the state another $20 now costing $70. If they’d like to make a 15% profit for operating their store, they’d add on around $11 bringing the price to $81. If this particular state’s sales tax is 7%, then your paying about $87. Buy the same box in Pennsylvania and it cost you $67. I think you get the picture.

We’re fortunate at The Cigar Thief to be based in the great state of Pennsylvania where lawmakers have upheld a zero tax status for premium cigars. As our valued customer, you’re fortunate to benefit from this. While we must collect your state’s sales tax, that’s it … at least for now.

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