A proposal to temporarily reduce taxes on premium cigars in Louisiana has advanced in the state legislature, following amendments that adjust its implementation timeline and duration.

House Bill 325, introduced by Rep. Marcus Bryant (D-New Iberia), seeks to alter the tax structure for cigars invoiced by manufacturers at more than $120 per 1,000 units. Currently, these cigars are taxed at 20% of the invoice price. Under the proposed legislation, this would shift to a flat rate of 50 cents per cigar.

The House Committee on Ways and Means approved the amended bill on May 14 with a 9-3 vote. The amendments delay the effective date of the new tax rate to January 1, 2026, and include a sunset clause that reinstates the original 20% tax rate on January 1, 2028, making the change temporary for two years .

Supporters argue that the flat tax would simplify the tax code and potentially lower prices for higher-end cigars. For instance, a cigar with a wholesale price above $2.50 could see a tax reduction under the new structure. However, opponents caution that lower-priced cigars might become more expensive, as the flat 50-cent tax could exceed the current 20% levy on less expensive products.

The bill now moves to the full House of Representatives for consideration and a vote is expected next week.

Industry stakeholders and consumers are closely monitoring the legislation, which could impact cigar pricing and sales dynamics across the state.