Oregon Lawmakers Look To Cigars For More Revenue

Jun 22, 2015

Cigar smokers in Oregon could soon have to pay more in taxes.

A legislative committee could advance a measure as soon as Tuesday that would remove a cap on the cigar tax. Analysts say lawmakers could expect to raise a smokin' $5 million per year in extra revenue if they move ahead with a plan to remove the current cap of 50-cents per cigar in state taxes.

Democratic House Speaker Tina Kotek said the cap means cigar aficionados are getting a hefty tax break.

"Right now those really nice, premium luxury cigars aren't taxed any more than 50 cents,” she said. “So are the cheap cigars. They're all treated equally.”

If the cap is removed, cigars would be taxed at 65 percent of the wholesale price. In Washington, the state tax on cigars is capped at 65 cents per cigar. In Idaho, cigars are taxed at 40 percent of the wholesale price and there is no cap.

Supporters of the 50-cent cap say removing it would drive the price of cigars so high that smokers would find ways to skirt the tax altogether, such as buying from online retailers.

The debate comes as lawmakers are putting the finishing touches on Oregon's budget for the upcoming two years.