A-2298

Primary Sponsors:
Assemblyman Wayne P. DeAngelo, Brian Bergen, and Jay Webber
Co-Sponsors:
Assemblymen John DiMaio, Gerry Scharfenberger, Erk K. Simonsen and Assemblywomen Nancy F. Muñoz and Dawn Fantasia.

STATEMENT

This bill limits the taxation of cigars under the Tobacco and Vapor Products Tax Act to a maximum of 50 cents per cigar. Currently, the tax on cigars is 30 percent of the wholesale price. Under this bill, the tax will still be 30 percent of the wholesale price, but the tax will be capped at 50 cents per cigar. The bill also amends current law to clarify tax payment responsibilities of tobacco product wholesalers and distributors.
Every state imposes some tax on non-cigarette tobacco products. Ten states have adopted a tax cap per cigar. Cigar retailers with establishments in those states have claimed that prior to the
establishment of the cap their retail sales prices suffered a serious competitive disadvantage with out-of-state, Internet, and catalog businesses that did not collect state tobacco products tax. Setting a maximum tax per cigar is proposed to encourage New Jersey consumers to make more of their cigar purchases from New Jersey “brick and mortar” retailers who are often small locally- owned businesses. A 50 cent per cigar tax cap will level the playing field for New Jersey retailers and potentially increase State revenues collected under the tax.