Posted on 11/09/2016 10:02:57 AM PST by Drango
For the first time since 1999, California has raised the taxes on cigarettes—and thanks to an interesting provision in the state laws, the state’s taxes on cigars are also going up.
Just before midnight local time, the Associated Press called the decision on Proposition 56, a ballot measure that asked California voters whether to raise the tax on cigarettes from 87 cents to $2.87 per pack.
California voters overwhelmingly said yes.
Taxes on cigars will also be going up substantially. California adjusts taxes on other tobacco products, including cigars, every year. The state’s Board of Equalization determines the rate by dividing the tax rate per cigarette—currently 4.35 cents—by the average wholesale cost per cigarette. This rate changes each year, it currently is 27.3 percent of the wholesale cost and has stayed around 30 percent since 2011.
In 2013, the Board of Equalization estimated that if the cigarette tax was raised to $2 per pack, the tax on other tobacco products, including cigars, would more than double, to 67.41 percent of the wholesale price.
This means a cigar with an MSRP of $9.50 likely retails for around $13.36 in the state currently, it will now retail for around $17.58 once the new taxes go into effect.
Matt Dogali, the senior director of state legislative affairs for the International Premium Cigar & Pipe Retailers Association (IPCPR), told halfwheel that the group is still waiting on a clarification of whether Proposition 56 will be instituted as a floor tax. There’s nothing in the language of the proposition itself, but a floor tax would mean retailers would be subject to paying additional taxes on all products on their shelves by a certain point. These taxes would be instituted so that all products on a retailers shelf had paid the same tax.
The next tax adjustment from the Board of Equalization is expected to go into effect on July 1.
Proposition 56 comes after numerous attempts by state Democrats to raise the cigarette tax through legislation. Bills failed in both the last regular session as well as a special session that resulted in California raising its minimum tobacco purchasing age from 18 to 21.
California’s 87 cents per pack tax on cigarettes was actually the 15th lowest in the country, it now will be the ninth highest in the nation.
Great news on Trump...This is also good news.
The black market will thrive now. they also passed the background check and 30 day wait for ammo. Pfft.
they did get the death penalty one right.
Okay. Fine. I get it.
I’ll stay away from California.
Soon they’ll tax sugar, fat and carbon footprint. Yeah, that’s good news alright. /sarc
Minorities hardest hit.
Higher taxes of smoke? No problem; the CA gentle giants will be forced to take what’s rightfully theirs via shoplifting.
President Trump needs to do some serious work on CA. I live here and the folks here a sheep gone astray. They have no common sense. I hope President Trump can help some folks here see the light if his plans produce a lot of prosperity.
atm withdrawls from ebt cards will be hit hard for a legal pack of smokes. the tijuana trail for smuggled smokes is going to gat really busy.
Something that should be well on it's way to being struck on 2nd amendment grounds once we get another conservative judge or two on the Supreme Court, along with a lot of other gun laws across the nation.
“President Trump needs to do some serious work on CA. I live here and the folks here a sheep gone astray. They have no common sense. I hope President Trump can help some folks here see the light if his plans produce a lot of prosperity.”
It would be a waste of time.
Something [30 day wait for ammo] that should be well on it’s way to being struck on 2nd amendment grounds once we get another conservative judge or two on the Supreme Court, along with a lot of other gun laws across the nation.
This tax is another waste of time, there will be no appreciable increase in state revenues simply because fewer people than ever are smoking. It’s been said that Eric “I can’t breathe” Garner would still be alive if it weren’t for NYC’s confiscatory tobacco tax, he would’ve had less of an incentive to sell black market loosies in front of that bodega in Staten Island.
Well Californians, I guess it’s time to switch to pot!
Not really. You have reservations in California that will not impose the tax. They will do well as will the smugglers. New York State has already proved that
I agree. I voted no to save another burden on the poor, cigarette addicts who already pay $5.00/pack. It will just give government more to spend when they're overtaxing and overspending already!
“President Trump needs to do some serious work on CA. I live here and the folks here a sheep gone astray. They have no common sense. I hope President Trump can help some folks here see the light if his plans produce a lot of prosperity.”
It would be a waste of time.
No problemo. Didn't they legalize "Wacky Tabbacky", so if cigarettes are too expensive, well they'll just switch.
I was already planning to quit once I got through the election.
I bet the taxes on MJ will be much lower than tobacco taxes.
I don’t care one way or another about MJ.
I voted against legalization because I believe it is being pushed to help dumb Americans down even more
Less smokers is a GOOD thing. As to an increase in revenue, who cares? Less smokers is good. Note, the tax is projected to raise over $1 billion next year. Sure it will decline over time as people quit...
They’ve taken away the cartels pot trade and replaced it the much easier and lucrative tobacco trade.
Smart.
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