Cigars Taxed, Senators Smokers

More than a dozen lobbyists for retailers and tobacco companies argued Tuesday before state senators considering whether to seek an estimated $15 million or more in improved tax collections by changing how cigars are taxed. The Department of Revenue testified before the Tax Collection Technology Subcommittee of the Senate Finance Committee that 7-23 percent of tobacco sold in the state is not taxed as required by law. That’s because cigars are usually sold separately, unlike cigarettes and chewing tobacco, which come in packages that carry a tax stamp. All of the witnesses agreed that unscrupulous vendors are importing cigars from Florida where there is no tax and selling them illegally in Georgia where they pocket the 23 cents they should be forwarding to the state of Georgia. “If you are buying from another state with a lower tax than Georgia, then you are scamming the system,” said Sen. Hardie Davis, D-Augusta. But that’s all the witnesses agreed on. Lobbyists for retailers and wholesalers that mostly market just in Georgia advocated some type of digital stamp on individual cigars. They figure their sales will increase when the crooks aren’t competing with them. But lobbyists for wholesalers who distribute in multiple states said requiring them to stamp cigars would increase their costs and wouldn’t be effective anyway. “This is additional regulations on these businesses,” said Bruce Bowers, lobbyist for the Southern Association of Wholesale Distributors. They argued for more tax auditors instead.