State Senate panel considers cigar tax cut
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State lawmakers are considering a proposal to significantly cut the tax on premium cigars.
Members of the Minnesota Senate tax committee heard testimony Wednesday for and against the bill, which would drop the maximum tax from $3.50 per cigar down to 50 cents.
Mark Wolk, the owner of a St. Paul tobacco shop, said during the hearing that the current tax is bad for business.
“Our neighboring states, such as Wisconsin and Iowa, are currently at a 50 cent cap,” Wolk said. “We have to compete with our neighbors and the Internet, who sell a box of 20 cigars for $60 to $90 less than we can. That leaves both our store and the state of Minnesota at a huge disadvantage and ultimately the losers in revenue.”
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But anti-smoking groups strongly oppose the legislation. They argue that the higher tax is needed to discourage people from smoking.
Janelle Waldock of the Raise it for Health coalition said the legislation doesn’t make sense.
“This proposal represents bad health policy and bad tax policy," she said. "In short, there is only one entity that this bill will benefit and that’s the tobacco industry. It’s bad for everyone else and most importantly, it’s bad for Minnesota.”
Under current law, a premium cigar must be hand-rolled. Senators removed a provision in the bill that would have struck that requirement.
The committee will consider including the tax cut in a larger bill.
The House version of the bill also remains in play.