Louisiana Cigar Tax Cap Bill Gets Amended, Clears Committee

[JohnS]

May 14, 2025 - Charlie Minato

Louisiana Cigar Tax Cap Bill Gets Amended, Clears Committee

A proposal to lower the taxes on premium cigars sold in Louisiana has cleared its first legislative hurdle, but not before getting a small but substantial tweak.

Yesterday, H.B. 325 cleared the Committee on Ways and Means by a vote of 9-3. However, the text was amended.

Currently, Louisiana taxes cigars in two different ways:

•     Cigars $120 or less per 1,000 units are taxed at 8 percent of the invoice price
•     Cigars more than $120 per 1,000 units are taxed at 20 percent of the invoice price

H.B. 325 would only affect the latter, i.e. any cigar that has an invoice price of more than 12 cents.

The bill would change the tax to 50 cents, something that would benefit cigars with a wholesale price of more than $2.50. The amendments mostly relate to the dates regarding the bill. The original version of the bill would have seen the new tax rate go into effect on July 1, 2025. Now, that won’t happen until Jan. 1, 2026.

Furthermore, the revised text reinstates the old 20 percent rate on Jan. 1, 2028. This means that H.B. 325 would only change the tax rate for two years—2027 and 2028—though the state could change the law and push that date further.

The proposed law won’t lower the tax on every cigar and could actually increase the cost of certain cigars. For example, a cigar with an MSRP of $9.50 is likely priced at $11.40 in humidors in Louisiana, which would reduce to $10 under H.B. 325. Conversely, a bundle cigar with an MSRP of $2.99 might cost $3.29 before sales tax, that number would jump to $3.49 under H.B. 325.

Next week, the Louisiana House of Representatives is expected to vote on H.B. 325.

Source: https://halfwheel.com/louisiana-cigar-tax-cap-bill-gets-amended-clears-committee/451695/