Tobacco.org

• Cigar tax proposal threatens US retailers, Latin American countries 

(Thomson Financial) - US specialty tobacco shops are worried that a proposed increase in federal taxes on cigars will drive thousands of small retailers out of business, and could also lead to substantial job losses in Latin American countries that produce and export most cigars sold in the US. . . .

Chris McCalla, legislative director for the Retail Tobacco Dealers of America, said the taxes being considered could force premium cigar prices in the US to double or even triple, since the tax would apply every time a cigar changes hands at the import, distribution and retail levels. As one example, he said a 4 usd cigar could cost as much as 12 usd under the new tax.

McCalla said the tax would likely drive a large percentage of the 3,600 specialty tobacco retailers in the US out of business, since he does not expect consumers to pay this steep price.

'If this happens, expect a great number of these family-owned cigar shops to close,' he said of the legislation. McCalla's group includes about 2,000 small retailers as members.

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