Two Minnesota senators are proposing that mini-cigars should be taxed as cigarettes, the Associated Press reports. Currently, the state defines little cigars as tobacco products, which have a lower tax rate than cigarettes. The Minnesota Department of Revenue predicts that reclassifying mini-cigars as cigarettes would bring in around $6 million for the 2012-13 fiscal year. Regular-sized cigars would keep the lower tax rate.
State Sens. Julie Rosen and Carla Nelson sponsored the bill. Rosen said it wasn’t for increased tax revenue but because the wrappings could appeal to youths.
Tobacco makers and wholesalers oppose the bill, pointing to studies that show a mere 1 percent to 2 percent of young smokers pick mini-cigars. In addition, wholesalers would have difficulty in affixing the state’s cigarette tax stamps to little cigar packaging using their current machinery. The Minnesota Wholesale Marketers Association said the job would have to be done by hand because of the differing sizes of little cigar packages.
Currently, a dozen states and the District of Columbia treat mini-cigars like cigarettes for taxing purposes.
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