moki
el Presidente
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I found this to be very useful information, and I didn't find it here when I searched, so....
from: http://www.cigarwise.com/artman/publish/article_39.shtml
.....
The Politics of Cigar Tax
By Maduro Mistress
Feb 12, 2004, 08:06
401 years ago (1603), King James I of England imposed a 4,000 percent tax hike to tobacco products of Virginia and Spain, and spent the next decade trying to harass the Virginia Company into giving up growing the plant. Anti-smoking politicians trying to regulate tobacco by taxation have been following his example ever since.
The political environment has become even more hostile in the last few years with citywide smoking bans sweeping across the nation, and the dwindling availability to enjoy the vices of our choosing without literally paying through the nose for them. Before 1980 only seven states had imposed taxes on cigars. By 1996, the number had increased to 35 states, with Oregon, Utah, Minnesota and Hawaii imposing a cigar tax of 35 percent or more and Washington a staggering 64.9 percent. The average state cigar tax in 2004 is approximately 27 percent.
Of the 22 states that raised taxes last year, every single one has seen tobacco sales drop. But not everyone is suffering. Want to know how much your habit is giving to the government? In 1975, according to the Tobacco Institute, total state tax revenue for tobacco products other than cigarettes was $32.6 million. In 1985 that number rose to $62.3 million. Today revenues are in excess of $337 million.
A tax is imposed and becomes due and payable when a permit holder (cigar vendor) receives cigars for the purpose of making a “first sale” in their state. The vast majority of states tax cigars as a percent of the wholesale price. This price is charged to the retailers by the wholesalers or distributors. Such a tax structure results in an increase in revenue as cigar prices go up. Six states; Alabama, Arizona, Georgia, New Mexico, Oklahoma and Texas, have a tax system similar to that of the Federal Government, where multiple rates apply according to the weight or price of the cigar. Manufacturer’s price is the third method of cigar taxation, which is based on the amount charged to the wholesalers or distributors by the tobacco company that makes the product. In some states, wholesale price and manufacturer’s price are the same.
As the rates stand now as of January 1, 2004, if you buy a $10.00 retail cigar in North Carolina, which has the lowest cigar tax of all 50 states at two percent, you will pay approximately $0.55 in taxes on top of your cigar purchase. Ten cigars at this rate will cost you approximately $100.00 plus the $5.50 in taxes. This is based on a cigar wholesale of $5.00, markup of 100%, or keystone, state sales tax (4.5 percent) and does not include U.S. Government tax of approximately 4.88% per 1,000 cigars.
If you bought the same $10.00 cigar in Washington, the state with the highest cigar tax at 129.42 percent (sales tax of 6.5 percent), you will be paying approximately $7.54 tax on top of the $10.00 retail price of the cigar. If you buy ten cigars at this rate you will be paying $100.00 for the cigars as well as approximately $75.40 tax on top of it. If you were back in North Carolina, your cigars would be $69.00 of tax cheaper.
Below is an illustrated table of cigar tax broken down by state:
Tax By State (Estimated)
Figures based on a $5 wholesale cigar price marked up at 100%
In states with multiple tax rates, highest rates are used (Georgia, Louisiana).
Estimated prices do not reflect U.S. Government tax of $1.828 - $48.75 per 1000 cigars.
Estimate prices do not reflect any additional county/city sales taxes.
Tax is calculated from Manufacturer’s Price: which is the price charged to the wholesalers or distributors by the tobacco company that makes the product. Wholesale price, which is the price charged to the retailers by the wholesalers or distributors, and by multiple rates applying to certain states according to the weight or price of the cigar.
Source: Federation of Tax Administrators.
The leaf and its lovers, however much taxed, are still as resistant to taxation as they were 401 years ago. There are even a few states left that have held out and have no cigar taxation at all: Florida, Kentucky, Pennsylvania and Virginia, (although West Virginia has a cigar tax of seven percent).
King James I may have been the first to impose heavy taxes on tobacco, but unfortunately he will not be the last. We're still paying our unfair share of levies and loading the coffers of local and state treasuries with our hard earned currency.
Ronald Regan said it best in his 1981 inaugural address. “Taxing power must not be used to regulate the economy or bring about social change.” Something to think about next time you step into a voting booth.
Sources:
- Tax Administration Organization, Jan. 2004 (www.taxadmin.org)
- Tobacco Free Kids Organization, Mar. 2003 (www.tobaccofreekids.org)
- National Cancer Institute, 2000 (www.cancercontrol.cancer.gov)
Early Tobacco Tax Certificate 1875 - 1885 - Cigar Box in Vignette Beautifully engraved un-issued certificate from the Internal Revenue for Tobacco Tax. This certificate was a business license for being a Manufacturer of Tobacco, Dealer in Leaf Tobacco, Peddler 2nd Class, and Dealer in Manufactured Tobacco. Each year had a different color to make it easier to determine the taxes were current when the certificate was posted on wall. There are 12 spaces on the certificate so it could be punched to represent the month the tax was paid.
from: http://www.cigarwise.com/artman/publish/article_39.shtml
.....
The Politics of Cigar Tax
By Maduro Mistress
Feb 12, 2004, 08:06
401 years ago (1603), King James I of England imposed a 4,000 percent tax hike to tobacco products of Virginia and Spain, and spent the next decade trying to harass the Virginia Company into giving up growing the plant. Anti-smoking politicians trying to regulate tobacco by taxation have been following his example ever since.
The political environment has become even more hostile in the last few years with citywide smoking bans sweeping across the nation, and the dwindling availability to enjoy the vices of our choosing without literally paying through the nose for them. Before 1980 only seven states had imposed taxes on cigars. By 1996, the number had increased to 35 states, with Oregon, Utah, Minnesota and Hawaii imposing a cigar tax of 35 percent or more and Washington a staggering 64.9 percent. The average state cigar tax in 2004 is approximately 27 percent.
Of the 22 states that raised taxes last year, every single one has seen tobacco sales drop. But not everyone is suffering. Want to know how much your habit is giving to the government? In 1975, according to the Tobacco Institute, total state tax revenue for tobacco products other than cigarettes was $32.6 million. In 1985 that number rose to $62.3 million. Today revenues are in excess of $337 million.
A tax is imposed and becomes due and payable when a permit holder (cigar vendor) receives cigars for the purpose of making a “first sale” in their state. The vast majority of states tax cigars as a percent of the wholesale price. This price is charged to the retailers by the wholesalers or distributors. Such a tax structure results in an increase in revenue as cigar prices go up. Six states; Alabama, Arizona, Georgia, New Mexico, Oklahoma and Texas, have a tax system similar to that of the Federal Government, where multiple rates apply according to the weight or price of the cigar. Manufacturer’s price is the third method of cigar taxation, which is based on the amount charged to the wholesalers or distributors by the tobacco company that makes the product. In some states, wholesale price and manufacturer’s price are the same.
As the rates stand now as of January 1, 2004, if you buy a $10.00 retail cigar in North Carolina, which has the lowest cigar tax of all 50 states at two percent, you will pay approximately $0.55 in taxes on top of your cigar purchase. Ten cigars at this rate will cost you approximately $100.00 plus the $5.50 in taxes. This is based on a cigar wholesale of $5.00, markup of 100%, or keystone, state sales tax (4.5 percent) and does not include U.S. Government tax of approximately 4.88% per 1,000 cigars.
If you bought the same $10.00 cigar in Washington, the state with the highest cigar tax at 129.42 percent (sales tax of 6.5 percent), you will be paying approximately $7.54 tax on top of the $10.00 retail price of the cigar. If you buy ten cigars at this rate you will be paying $100.00 for the cigars as well as approximately $75.40 tax on top of it. If you were back in North Carolina, your cigars would be $69.00 of tax cheaper.
Below is an illustrated table of cigar tax broken down by state:
Tax By State (Estimated)
Figures based on a $5 wholesale cigar price marked up at 100%
In states with multiple tax rates, highest rates are used (Georgia, Louisiana).
Estimated prices do not reflect U.S. Government tax of $1.828 - $48.75 per 1000 cigars.
Estimate prices do not reflect any additional county/city sales taxes.
Tax is calculated from Manufacturer’s Price: which is the price charged to the wholesalers or distributors by the tobacco company that makes the product. Wholesale price, which is the price charged to the retailers by the wholesalers or distributors, and by multiple rates applying to certain states according to the weight or price of the cigar.
Source: Federation of Tax Administrators.
The leaf and its lovers, however much taxed, are still as resistant to taxation as they were 401 years ago. There are even a few states left that have held out and have no cigar taxation at all: Florida, Kentucky, Pennsylvania and Virginia, (although West Virginia has a cigar tax of seven percent).
King James I may have been the first to impose heavy taxes on tobacco, but unfortunately he will not be the last. We're still paying our unfair share of levies and loading the coffers of local and state treasuries with our hard earned currency.
Ronald Regan said it best in his 1981 inaugural address. “Taxing power must not be used to regulate the economy or bring about social change.” Something to think about next time you step into a voting booth.
Sources:
- Tax Administration Organization, Jan. 2004 (www.taxadmin.org)
- Tobacco Free Kids Organization, Mar. 2003 (www.tobaccofreekids.org)
- National Cancer Institute, 2000 (www.cancercontrol.cancer.gov)
Early Tobacco Tax Certificate 1875 - 1885 - Cigar Box in Vignette Beautifully engraved un-issued certificate from the Internal Revenue for Tobacco Tax. This certificate was a business license for being a Manufacturer of Tobacco, Dealer in Leaf Tobacco, Peddler 2nd Class, and Dealer in Manufactured Tobacco. Each year had a different color to make it easier to determine the taxes were current when the certificate was posted on wall. There are 12 spaces on the certificate so it could be punched to represent the month the tax was paid.
