Pa. Tobacco Tax Exemption Stays in Place

Pennsylvania has long exempted cigars and smokeless tobacco from state taxes, and the policy is likely to remain in place thanks to lobbying by the state’s cigar-makers and tobacco growers, the Associated Press reported Oct. 1.

Gov. Ed Rendell had proposed taxing the products to raise $50 million to help close the state’s budget gap; he had floated a similar tax proposal in 2007 to help pay for health insurance. But some lawmakers objected, citing concerns about protecting tobacco growers in the southeastern part of the state, cigar company workers, and blue-collar users of chewing tobacco.

Four of the biggest cigar retailers in the U.S. are located in Pennsylvania, and the president of Cigars International in Bethlehem said the firm would consider moving to Florida if the tax was approved.

State lawmakers did vote to increase the cigarette tax by $1.60 per pack and also apply it to mini cigars, called cigarillos, which are made out of state and compete with locally produced cigars.

Editor’s Note, Oct. 2, 2009: The headline has been changed from ’Tobacco Industry Help Snuff Proposal to End Tax Exemption’ to the above. The content of the summary remains unchanged.