Bill > SB1505

This bill establishes a new definition for "premium cigars" and introduces a distinct tax structure for these tobacco products in Hawaii. The legislation defines a premium cigar as a handmade or hand-rolled cigar with specific characteristics, including being wrapped in whole tobacco leaf, containing long filler tobacco, having no filter or non-tobacco tip, and lacking any characterizing flavors other than tobacco. The bill also adds a definition for "characterizing flavor," which refers to distinguishable tastes or aromas like candy, fruit, or alcoholic drinks. Importantly, the bill removes premium cigars from the existing percentage-based tobacco product tax and instead imposes a flat excise tax of 50 cents per premium cigar starting January 1, 2026. The legislature's rationale for this change is to help local premium cigar sellers, including those using Hawaii-grown tobacco, become more competitive with mainland and online retailers by reducing the tax burden. By creating a separate tax category and defining premium cigars more narrowly, the bill aims to support the local cigar industry while potentially increasing state tax revenue by making in-state purchases more attractive. The new law will take effect on July 1, 2025.

Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1505&year=2025