Provides that the tax on premium cigars shall be at the rate of seventy-five percent of the wholesale price or fifty cents, whichever is less, and is intended to be imposed only once upon the sale of any premium cigars; defines "premium cigar"; provides for the repeal of such provisions upon expiration thereof.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5284A
SPONSOR: Ramos TITLE OF BILL:
An act to amend the tax law, in relation to excise taxes on premium
cigars; and providing for the repeal of such provisions upon expiration
thereof
PURPOSE:
To establish the rate of the tobacco products tax exclusively for premi-
um cigars at seventy-five percent of the wholesale price or fifty cents,
whichever is less.
SUMMARY OF PROVISIONS:
Section 1 establishes the definition of "premium cigar"
Section 2 makes necessary technical amendments to paragraph (a) of
subdivision 1 of § 471-b the tax law.
Section 3 caps the amount of the tobacco products tax for premium cigars
at fifty cents per item. Section 4 establishes the effective date.
JUSTIFICATION:
Tax rates on premium cigars in New York, coupled with the pandemic-fu-
eled shift to online purchasing, has driven the sale of these products
to neighboring states/online where tax rates are much lower (PA, 0%; NH,
0%; NJ, 30%; RI, 50 cents per; CT, 50 cents per). This has had severely
negative effects on the sustainability of over 200 premium cigar shops
in New York that were already suffering due to the COVID-19 pandemic.
Capping the premium cigar tax rate at fifty cents per item would mini-
mize the cost advantage of buying online as well as strengthen sales
within the State. Additionally, this would prove to be an effective
measure to help increase state revenues.
Establishing a tax cap at fifty cents per item will work to conform to a
number of other states and create an equal playing field for
small,business retail tobacconists.
LEGISLATIVE HISTORY:
2023-24: A8912 (Ramos) referred to ways and means
FISCAL IMPACT:
TBD
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed 3 years after such date
STATE OF NEW YORK
________________________________________________________________________
5284--A
2025-2026 Regular Sessions
IN ASSEMBLY
February 12, 2025
___________
Introduced by M. of A. RAMOS -- read once and referred to the Committee
on Ways and Means -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to excise taxes on premium
cigars; and providing for the repeal of such provisions upon expira-
tion thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 470 of the tax law is amended by adding a new
2 subdivision 22 to read as follows:
3 22. "Premium cigar." A cigar that:
4 (a) is wrapped in whole leaf tobacco; and
5 (b) contains a one hundred percent leaf tobacco binder; and
6 (c) is made by manually combining the wrapper, filler, and binder; and
7 (d) has no filter, tip, or non-tobacco mouthpiece and is capped by
8 hand; and
9 (e) weighs more than six pounds per one thousand units.
10 § 2. Paragraph (a) of subdivision 1 of section 471-b of the tax law,
11 as amended by section 18 of part D of chapter 134 of the laws of 2010,
12 is amended to read as follows:
13 (a) Such tax on tobacco products other than premium cigars, snuff and
14 little cigars shall be at the rate of seventy-five percent of the whole-
15 sale price, and is intended to be imposed only once upon the sale of any
16 tobacco products other than premium cigars, snuff and little cigars.
17 § 3. Subdivision 1 of section 471-b of the tax law is amended by
18 adding a new paragraph (d) to read as follows:
19 (d) Such tax on premium cigars shall be at the rate of seventy-five
20 percent of the wholesale price or fifty cents, whichever is less, and is
21 intended to be imposed only once upon the sale of any premium cigars.
22 § 4. This act shall take effect immediately and shall expire and be
23 deemed repealed 3 years after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05192-04-5
