State lawmakers are considering whether to seek an estimated $15 million in improved tax collections by changing how cigars are taxed. Some Georgia retailers hope it evens out the market.
According to the Department of Revenue, 7 percent to 23 percent of tobacco sold in Georgia is not taxed as required by law because, unlike cigarettes or chewing tobacco, most cigars are sold separately and don’t come in a package that has a tax stamp.
Opponents of the cigar tax -- primarily lobbyists for wholesalers who sell cigars out of state -- argue that a tax will increase their costs and won’t be effective.
But supporters, like Glynn Segars, who owns The Cigar Shop in Athens, say a cigar tax will level the playing field.
“Having this bill that makes all retailers accountable for the same taxes we pay in the state, I don’t see any downside to this,” Segars said. “As someone who operates a clean budget and a very open-book business, I don’t see how we lose.”
Georgia senators heard testimony recently about changing the way Georgia taxes cigars. Sen. Bill Heath of Bremen, chairman of the Senate Finance Committee, agreed a cigar tax will level the playing field for Georgia retailers.
“If the law and the enforcement mechanisms are not such that it’s applied fairly to everybody, then it’s a disadvantage to the folks who are trying to do the right thing and paying the taxes that are supposed to be paid,” Heath said.
Tax legislation will go before the House of Representatives first when the legislative session begins in January.
Georgia anti-tobacco groups are also hoping to tack on an additional dollar to the cigarette tax.