Key points:
- House Bill 325 would restructure cigar taxes, lowering rates for premium handmade cigars while raising them for lower-cost, value-priced cigars.
- Cigars with a retail price above $5 could see price cuts, while those under $5—mainly machine-made—would likely become more expensive.
- The bill, introduced by Rep. Marcus Bryant, is expected to face resistance from retailers who rely on machine-made cigar sales.
A new bill introduced in the Louisiana House of Representatives could reshape how cigars are taxed in the state, offering potential savings for premium cigar smokers while increasing costs for buyers of machine-made products.
House Bill 325, sponsored by Rep. Marcus Bryant, seeks to revise the tax structure applied to cigars with a wholesale price exceeding $0.12 per unit. Currently, Louisiana imposes two tax rates based on wholesale pricing: cigars priced under $120 per 1,000 units are taxed at 8% of the invoice price, while those priced above that threshold are taxed at 20%.
Bryant’s bill would adjust the tax formula for the latter category, effectively reducing the tax burden on more expensive, handmade cigars and increasing it on budget-friendly ones.
“This is about making the tax structure more equitable for small cigar shops and premium products,” Rep. Bryant said.
Under the proposal, cigars with a manufacturer’s suggested retail price (MSRP) of more than $5 would benefit from a tax reduction. For example, a cigar currently selling for around $11.40 in Louisiana could drop to approximately $10 under the new plan. On the other hand, a $2.99 cigar—commonly found in bundles or convenience stores—could rise in price by $0.20 or more.
Retailers specializing in value cigars, which make up a significant portion of the market, are expected to push back against the proposal. Similar efforts in other states often include a cap to limit how much tax can be levied on any single cigar, something H.B. 325 does not currently offer, reports Halfwheel.
At this time, the bill has no co-sponsors and faces an uphill battle in gaining broader legislative support. If passed, the changes would take effect on invoices issued starting July 1, 2025.
