Cigars, Cigar Information and where to find Premium Cigars, Discounted Cigars and even Cheap Cigars - SENATE COMMITTEE TO PROPOSE UP TO $10 PER CIGAR TAX!

SENATE COMMITTEE TO PROPOSE UP TO $10 PER CIGAR TAX!

SENATE COMMITTEE TO PROPOSE UP TO $10 PER CIGAR TAX!

You must call-fax-email your Senator today!

Los Angeles, July 18 – Lew Rothman, the head of J-R Cigars, is a talented writer and put it better than anyone we’ve seen in a post on CigarFamily.com:

Everyone and I mean everyone that even smokes a cigar now and then has to be on alert for messages from all [bricks & mortar] smoke shops AND Internet vendors AND Manufacturers in the next few days regarding the proposed new tax on tobacco products:

“The Senate Finance Committee has scheduled a markup on Tuesday, July 17 on legislation dealing with the State Children's Health Insurance Program (SCHIP). The measure is expected to be reported out of committee. Funding would be almost totally via higher taxes on tobacco products. The cigarette tax will increase by $.61 to $1 per pack effective after December 31, 2007. Other tobacco products would be taxed as follows: large cigars – 53.13% of mfr's or importer's sales price but not more than $10.00 per cigar.”

In addition, there will be a floor stocks tax on tobacco products manufactured in the U.S. or imported into the U.S. which are removed before January 1, 2008 and held on that date for sale. The person holding the product on January 1, 2008 is liable for the tax to be paid on or before April 1, 2008.

YES! You read that right! $10.00 PER CIGAR, plus whatever your local state tax is. The people in Washington have absolutely no clue about the cigar business. Their sole focus is on cigarettes and we are about to get dragged along with it.

Not only will this put virtually every manufacturer, wholesaler, and retailer out of business, it will also devastate the economy of Nicaragua, Honduras, The Dominican Republic and have a significant impact on Puerto Rico, Indonesia, Costa Rica, Panama, Brasil, and Peru. (Whereupon, I’m sure the USA will be called upon to provide additional relief funding!).

You and everyone else who has any thoughts about continuing to smoke cigars or grow, sort, manufacture, distribute or retail cigars need to make a concerted phone, mail, and e-mail bombardment of Congress very shortly. Hopefully, someone more adept at interpreting this new tax law will supply the proper language for this protest.

Be ready and be vocal, and be outraged because this tax is definitely outrageous. It is my firm belief that if passed as it stands right now the entire industry will collapse prior to April 1, 2008 (appropriately named April Fools Day for the Fools we have running the government right now) because no one will have the finances to pay the tax on their inventory.

This has been widely followed up by messages from retailers of all types. We found one of the best summaries of the facts to be provided by the Cigar Association of America as follows: • “The proposed taxes in the current Senate Finance Committee proposal to fund expansion of the State Children’s Health Insurance Program (SCHIP) solely through higher tobacco taxes will have a draconian impact on the cigar industry. Indeed, it is the biggest threat to the industry since President Clinton’s proposal in the early 1990s to fund universal health care on the back of the tobacco industry.

• “Under the current proposal, the large cigar tax rate would increase 156.4% (from 20.719% to 53.13% of the manufacturer’s selling price) and the current tax cap of around $0.05 per cigar would increase an astounding 20,413% to $10 per cigar – essentially making the cap irrelevant. All large cigars would effectively be taxed at 53.13% of the manufacturer’s selling price. In all of the Internal Revenue Code, no other product is subject to an excise tax that approaches this level. The little cigar tax would increase 2,635% – to $1,828 per 1,000 from $50 per 1,000. To compound the injury, a floor stocks tax would be assessed on all products in inventory.

• “The Finance Committee is scheduled to mark up the measure [Tuesday night]. We anticipate no changes being made in the revenue provisions. The full Senate is expected to consider the legislation next week, but possibly sooner. We need you to act now and immediately contact your U.S. Senators as well as Senators in those states in which you may have a plant, distribution facility, or sales personnel . . .

• “A consumer should only contact his own Senators because Senators are most responsive to their own constituents.”

Click here for a contact list of U.S. Senators with telephone numbers and electronic mail addresses. Every call counts, because almost all elected officials will open a new file on a matter if they receive 10 or more contacts of any kind from within their jurisdiction.

To underscore the severity of this issue, the Senate voted 59-40 on March 23 in agreement with a resolution (S. Admt. 510 to S. Con. Res. 21) to “provide for the consideration of an increase in the tobacco products user fee rate, but only to the extent that such rate increase does not result in an increase of more than 61 cents per pack of cigarettes, with all revenue generated by such increase dedicated to the reauthorization and expansion of the State Children's Health Insurance Program.”

The raise to $10 per cigar comes from an obviously unknowing Senate draftsman who is attempting to “equate” the proposed 61-cent increase on a pack of cigarettes to cigars and has created a monster.

The stakes are enormous not just for smokers, but also for the tens of thousands of people who own or work in retail shops, work in or around the cigar industry and are part of the growing and processing of tobacco and making of cigars.

Call, write or e-mail now-now-now!

Bulletin: Altadis to be bought by Imperial:
The Wall Street Journal reported that Altadis will accept a 50 Euro-per-share bid from Imperial Tobacco in a transaction that will create the third-largest tobacco concern in the world. More details on Thursday.
~ Rich Perelman

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