What's happening
This bill defines "premium cigar" and caps the excise tax on cigars and premium cigars at seventy-five percent or fifty cents, whichever is less.
Why it matters
Defines "premium cigar" with strict criteria. including requirements for natural wrappers, handmade construction, no added flavors, and specific weight—potentially excluding some products from the designation and tax cap, which could shape what products are eligible for lower taxes and influence what’s sold in NY.
Tax cap could lower prices on higher-end cigars. by limiting the excise tax to 75% of wholesale price or 50 cents (whichever is less), the bill could make premium and higher-priced cigars more affordable to consumers and may encourage specialty retailers.
Could impact New York’s tobacco tax revenue. since premium cigars often have high wholesale prices and were previously taxed at a higher dollar amount, the cap may reduce state revenue from this sector, triggering budget considerations or shifts in enforcement focus.
May influence public health policy debates. by treating premium cigars differently from other tobacco products, this bill could fuel ongoing discussions about the health risks of cigars versus cigarettes and other tobacco products, and about the appropriateness of tax policy as a health intervention tool.
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Who cares
Headline styles
Cap Cigar Excise Tax
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to budget and revenue
- Referred to budget and revenue
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
93
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sen. GALLIVAN -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to excise taxes on cigars and premium cigars
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 470 of the tax law is amended by adding a new subdivision 22 to read as follows:
22. "Premium cigar." Means any roll of tobacco for smoking that is wrapped in whole tobacco leaf; contains a one hundred percent leaf tobacco binder; contains at least fifty percent (of filler by weight) long leaf tobacco; is handmade or hand rolled; has no filler, nontobacco tip or nontobacco mouthpiece; does not have a characterizing flavor other than tobacco; contains only tobacco, water and vegetable gum with no other ingredients or additives; and weighs more than six pounds per one thousand units.
§ 2. Paragraph (a) of subdivision 1 of section 471-b of the tax law, as amended by section 18 of part D of chapter 134 of the laws of 2010, is amended to read as follows:
(a) Such tax on tobacco products other than cigars, premium cigars, snuff and little cigars shall be at the rate of seventy-five percent of the wholesale price, and is intended to be imposed only once upon the sale of any tobacco products other than cigars, premium cigars, snuff and little cigars.
§ 3. Subdivision 1 of section 471-b of the tax law is amended by adding a new paragraph (d) to read as follows:
(d) Such tax on cigars or premium cigars shall be at the rate of seventy-five percent of the wholesale price or fifty cents, whichever is less, and is intended to be imposed only once upon the sale of any cigars or premium cigars.
§ 4. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00749-01-5
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to excise taxes on cigars and premium cigars
Purpose
To establish the rate of the tobacco products tax exclusively for premi- um cigars or cigars at seventy-five percent of the wholesale price or fifty cents, whichever is less.
Summary of provisions
Section 1 establishes a definition of "premium cigar" under section 470 of the tax law.
Section 2 makes necessary technical amendments to paragraph (a) of subdivision 1 of § 471-b the tax law.
Section 3 amends subdivision 1 of § 471-b of the tax law governing the imposition of a tobacco products tax by adding a new paragraph (d) capping the amount of said tax for premium cigars and cigars at fifty cents per item.
Section 4 establishes the effective date.
Justification
Small business is the backbone of New York's economy. The recent increase in the tobacco products tax, as codified pursuant to the FY 2021 State budget, on cigars and premium cigars in particular, has nega- tively affected hundreds of independent retail tobacconist shops across New York by driving consumers of such products to other outlets outside the State or to locations not subject to the State's taxing authority.
This new tobacco products tax rate is also likely to have an adverse effect on the expected increase in tax revenue as consumers shop else- where. Moreover, this new tobacco products tax is inconsistent with the tax rate imposed by contiguous states. Recently, the State of New Jersey capped its tobacco products tax on cigars at fifty cents per item.
Establishing a rate cap on the products tax as proposed by this legis- lation will conform such tax with an ever growing number of States doing the same and is essential to maintaining a level playing field for small business retail tobacconists.
Legislative history
2023-24: S.78 Referred to Budget and Revenue
2021-22: S.4820 Referred to Budget and Revenue
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.