Minnesota Lawmaker Proposes Cigar Sin Tax Cut

Published March 30, 2015

In Minnesota, State Rep. Jim Nash (R-Waconia) introduced a bill to reduce the state’s excise tax on cigars by up to $3, lowering the tax to $0.50 per unit.

Currently, a 95 percent tax is added to the price of cigars, increasing the price by $3.50. Nash’s bill would lowering Minnesota’s cigar tax rate, equalizing the state’s tax rate with the rate applied in Wisconsin.

As reported by KARE-TV 11, cigar shop owner Mark Wolk says small businesses like his are good members of their communities.

“We are a small business with real ties to our community, and we are part of the fabric that historic Grande Avenue in St. Paul,” Wolk said. “Our store has never had an underage violation. We do not promote to young people, nor do we encourage that business.”

Despite this, Wolk said, the $3.50-per-cigar tax puts business owners like him at a large disadvantage.

“Each year our buying power diminishes, because, unlike other industries we have to pay the monthly tobacco tax before we sell our product,” he said.

In remarks to the committee, Nash said the tax penalizes family-owned business like Wolk’s.

“All of the cigar stores I’ve been to are family owned cigar stores, and it’s making it tough for them to get by,” Nash said.

Jesse Hathaway ([email protected]) is managing editor of Budget & Tax News.

The photo “House Chamber, Minnesota State Capitol.jpg” is copyright © 2010 Chris Gaukel, and was made available under a Creative Commons Attribution-Share Alike 2.0 Generic license.