Bill > HB1426

This bill establishes a new definition for "premium cigars" and introduces a specific tax structure for these products in Hawaii. The bill defines a premium cigar as a hand-rolled tobacco product meeting specific criteria, such as being wrapped in whole tobacco leaf, containing long filler tobacco, having no filter, and containing only tobacco, water, and vegetable gum. The bill also introduces a definition for "characterizing flavor," which refers to distinguishable non-tobacco tastes like candy, fruit, or chocolate. Under the new legislation, premium cigars will be subject to a flat 50-cent excise tax per cigar, effective January 1, 2026, and will be excluded from the previous percentage-based tobacco product tax. The legislature's rationale for this change is to support local cigar retailers and reduce competitive disadvantages, particularly for businesses selling premium cigars made with Hawaii-grown tobacco. By implementing a fixed tax rate instead of a percentage-based system, the bill aims to make premium cigars more affordable and potentially increase in-state sales while still generating tax revenue for the state. The bill will take effect on July 1, 2025, giving businesses time to prepare for the new tax structure.

Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1426&year=2026