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Cigar makers rally to head off tax
[April 15, 2009]

Cigar makers rally to head off tax


TAMPA, Apr 15, 2009 (Tampa Tribune - McClatchy-Tribune Information Services via COMTEX) -- Steeped in smoky tradition, Tampa's cigar makers and retailers are fuming over a proposal to increase the state's tobacco tax, saying the added cost could snuff out the business they have built up in the past 120 years.



The Florida Senate has proposed a bill that would increase taxes on cigarettes and impose what could be the first tax on cigars made and sold in the state. For Tampa cigar rollers, that could put a damper on an industry that is ingrained in the fabric of the Bay area.

Tampa was a tiny village in the late 19th century when the cigar makers, including Vicente Martinez Ybor, came to town with a notion to build a cigar factory. Tampa's population boomed around the turn of the century, with most of the growth attributed to the making and selling of cigars.


Tuesday, local cigar makers and sellers mounted a petition campaign to thwart the move to tax their stogies, using rallies and a public relations campaign. About 75 protesters lined up on Dale Mabry Highway and Kennedy Boulevard to denounce the state's proposal to raise taxes. Despite the rain and steady wind, most smoked cigars and held up signs that said, "Cigar Smokers Rock, Tobacco Taxes Should Drop" and "Tobacco Taxed to the Max." "The Senate is proposing a bill that would tax cigars at the rate of $1 per ounce," said Eric Newman, owner of J.C. Newman Cigar Co. in Ybor City. "The state cigar tax would be on top of the massive federal tax increase that went into effect on April 1. Our consumers are just now going through sticker shock because of federal tax." With 70 percent of the cigars sold in the United States either made in, imported to or sold in Florida, Newman said the bill could lead to more people out of work in the Tampa Bay area.

"Cigars are a luxury, a discretionary item," Newman said. "They are not a necessity. Cigars are a choice, and as prices go up and up, sales will go down and down. That means we will be making fewer cigars with fewer people." The larger cigar makers in Tampa employ as many as 500 people, he said.

According to the Florida Tobacco Tax Web site, which pushes for the increase in taxes, Florida's tobacco tax rate is the fifth lowest in the nation. The Web site says the state hasn't raised the tobacco tax since 1990.

The Senate's proposal not only would increase the tax on packs of cigarettes but also boost the prices for chewing tobacco, smokeless tobacco and cigars. Some estimates say the new tariff could produce as much as $850 million a year, almost double what is collected today.

The bill still needs the signature of Gov. Charlie Crist, who has been reluctant to impose new taxes.

State Sen. Victor Crist, said in an interview last week that he will try to get cigar makers exempted from the tax.

News Channel 8 reporter Peter Bernard contributed to this report. Reporter Keith Morelli can be reached at (813) 259-7760.

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