Montana Governor Signs 35 Cent Tax Cap On Cigars Into Law
Montana Governor Greg Gianforte signed Senate Bill 122 into law on Tuesday, which calls for a 35 cent tax cap on the sale of premium cigars. Sponsored by Montana Sen. Greg Hertz, SB 122 represents a major victory for cigar smokers and retailers in Big Sky Country as the previous tax rate on premium cigars was 50 percent of the wholesale price. The new law will go into effect on July 1.
The impact on retail prices will be quite significant. Most premium cigars carry a retail price of twice the wholesale value, so a $10 cigar, for example, has a tax of $2.50 in Montana (or 50 percent of $5). A $15 cigar carries a tax of $3.75 and a $20 smoke is taxed at $5. With the new tax cap, this progressive taxation becomes a thing of the past.
The successful passing of SB 122 is the culmination of a year’s worth of collaborative effort between the Premium Cigar Association, the Montana Cigar Association and its member tobacconists, as well as various legislators and lobbyists. SB 122 passed in the Montana House of Representatives with a vote of 70-28 and the Montana Senate with 39 for to 10 votes against. It was sent to Governor Gianforte’s desk at the tail end of last month before being signed into law yesterday.
“This was a grand example of a coalition of local shop owners, that built upon their relationships with members of the legislature, making their case and ushering a bill through the process,” said PCA director of state advocacy Glynn Loope. “The local cigar shops of Montana, though, made the difference.”
Loope also made clear that the recent passing of the tax cap bill in Idaho, and the North Dakota bill allowing cigar bars—both of which were signed into law by the state governors—played a significant role in the passage of SB 122. Loope even made specific mention of the Idaho 50-cent tax cap law in his testimony to the Montana Legislature.
“It is amazing to see the fruits of your efforts when the votes are counted. The overwhelming Bi Partisan margins in the House and Senate proved that our message of tax fairness resonated,” stated local shop owner and president of the Montana Cigar Association, Ken Weinheimer, in collaboration with his lobbyist, Scott Boulanger of Boulanger Associates, both of whom were pivotal in SB 122’s passing. “We certainly appreciate the Governor signing this bill that helps local small businesses.”
Similar tax cap bills have been introduced and/or are still pending in a number of states, including Nevada where the proposed bill just received a committee hearing, as well as similar proposals in Virginia and Nebraska, among others. PCA is hopeful that the passage of tax cap bills in states like Idaho and Montana will serve as an example for other state legislative bodies.
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