Typically laws and legislation are introduced to help solve a problem but many unintentionally create even bigger problems. That is the case in New York where many tobacco retailers and businesses are concerned that a proposed hike in the state’s excise taxes on cigars could create a black market for premium cigars.
James Kommer, owner of James & Sons Tobacconists in Saratoga Springs, penned an opinion piece in the New York Post bringing into question the impact these new taxes would have on retailers and consumers. The proposed hike on cigar taxes made by Gov. Andrew Cuomo comes as the state faces a $4.4 billion budget deficit and if passed would go into effect on Sept. 1. This would not a modest tax increase–cigar taxes would go from the the standard 28.5 percent to 75 percent, meaning consumers could see a cigar that is currently being sold for $8 increase to $11.
Like many states, New York’s assault on the tobacco industry has been aggressive. In 2017, New York’s Mayor Bill de Blasio introduced a tax increase on cigars that set a minimum of $8 for a single cigar being sold, eliminating cigars that were being sold for a more affordable price point. On top of that, he also introduced a 10 percent tax on cigars. In Kommer’s opinion, if Cuomo’s proposed tax is passed into law, the state could see the closure of many small businesses.
