September 25, 2019, Washington, DC — In response to newly proposed federal legislation, the Premium Cigar Association is launching a campaign to oppose massive tax hikes against the premium cigar and pipe tobacco industry.

Congress, under the guise of addressing the Youth Vaping Epidemic, has introduced two bills that massively increase taxes for all tobacco products —including premium cigars. The legislation threatens the viability of thousands of small businesses across the country and risks putting tens of thousands of employees out of work.

In the Senate, Dick Durbin (D-Illinois) introduced the Tobacco Tax Equity Act of 2019 (S.2517) with the support of Democrat Senators Brown, Markey, Blumenthal, Reed, Hirono, Wyden, Murray, and Merkley. This legislation would ultimately increase excise taxes on cigars and pipe tobacco by:

1. Amending Section 5701(f) of the IRS Code of 1986 by striking “$2.8311 cents” and inserting “$49.56” for Pipe Tobacco.
2. Amending section 5701(a) of the IRS Code of 1986 by striking “$50.33” and inserting “$100.66” for Small Cigars.
3. Amending Paragraph (2) of section 5701(a) of the IRS Code of 1986 by striking “52.75 percent” and all that follows through the period and inserting the following: “$49.56 per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than 10.066 cents per cigar for large cigars”. It would also allow for: “The Secretary of the Treasury, or the Secretary’s delegate, may issue guidance regarding the appropriate method for determining the weight of large cigars for purposes of calculating the applicable tax under section 5701(a)(2) of the Internal Revenue Code of 1986.”

In the House of Representatives, Congressman Tom Suozzi (D-Long Island, Queens) introduced the Quell Underage Inhaling of Toxic Substances (QUITS) Act (H.R. 4425) alongside representatives Peter King, Steve Cohen, Jimmy Panetta, Raja Krishnamoorthi, and David Ciclline. This legislation would ultimately increase excise taxes on cigars and pipe tobacco by:

1. Amending Section 5701(f) of the IRS Code of 1986 by striking ‘‘$2.8311 cents’’ and inserting ‘‘$73.85’’ for Pipe Tobacco.
2. Amending Section 5701(a) of the IRS Code of 1986 by striking ‘‘$50.33’’ and inserting ‘‘$150’’ for Small Cigars.
3. Amending Section 5701(a) of the IRS Code of 1986 by striking ‘‘52.75 percent’’ and all that follows through the period and inserting ‘‘$73.85 per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than cents per cigar.’’ It would also provide authorization as follows: “Secretary of the Treasury, or the Secretary’s delegate, may issue guidance regarding the appropriate method for determining the weight of large cigars for purposes of calculating the applicable tax under section 5701(a)(2) of the Internal Revenue Code of 1986.”
4. SPECIAL RULE—"Beginning on the date that is 1 year after the date of enactment of the Quell Underage Inhaling of Toxic Sub stances Act of 2019, except as provided in sub paragraph (C), a tobacco product or any of its component parts or accessories (including the tobacco, filter, or paper) shall not contain, as a constituent (including a smoke constituent) or additive, an artificial or natural flavor (other than tobacco) that is a characterizing flavor of the tobacco product or tobacco smoke or an herb or spice, including menthol, mint, strawberry, grape, orange, clove, cinnamon, pineapple, vanilla, coconut, licorice, cocoa, chocolate, cherry, or coffee. Nothing in this subparagraph shall be construed to limit the Secretary’s authority to take action under this section or other sections of this Act applicable to any artificial or natural flavor, herb, or spice.’’

"We are not going to sit idly by when Congress gives speeches against vaping, but their actual policies attack premium cigars and pipe tobacco, which are not part of the youth access problem, " said Joshua Habursky, Director of Federal Affairs for the Premium Cigar Association. "These are cringeworthy tax increases that hurt retailer small business owners, employees, manufacturers, and ultimately every cigar enthusiast.”

To stop the tax hikes from coming into fruition, the PCA is launching a nationwide email and social media campaign to garner massive support from retailers, retailer employees, and premium cigar and pipe tobacco enthusiasts nationwide.

People can take action today by customizing one of the PCA's pre-written letters or writing their own, and sending it on to their elected officials in a matter of seconds!