This bill amends the Tobacco and Vapor Products Tax Act to limit the tax on cigars to a maximum of $0.50 per cigar, while maintaining the existing tax rate of 30 percent of the wholesale price. The new language specifies that the tax imposed on cigars will not exceed this cap, which aims to address competitive disadvantages faced by local cigar retailers compared to out-of-state and online sellers. The bill also clarifies the tax payment responsibilities for wholesalers and distributors of tobacco products, ensuring that the compensating use tax is payable directly to the director by retail dealers or consumers if the distributor or wholesaler fails to pay.

The intent behind this legislation is to encourage consumers to purchase cigars from New Jersey brick-and-mortar retailers, many of which are small, locally-owned businesses. By establishing a tax cap, the bill seeks to create a more equitable market environment for local retailers, potentially increasing state revenue from cigar sales while supporting local businesses. This approach aligns with practices in other states that have implemented similar tax caps on cigars.

Statutes affected:
Introduced: 54:40B-2, 54:40B-3, 54:40B-5