By now most of you already know that Governor O’Malley and Legislative Leaders will be holding a special session starting on Monday, May 14 for the purpose of passing a revenue package that will increase taxes and permit the State of Maryland to avoid the current “Doomsday Budget” that is scheduled to take effect July 1.
At this point, we believe that the structure of taxes on “Other Tobacco Products” will remain unchanged from the end of the regular Session in early April. There was a difference in the House and Senate treatment of premium cigars at that time, with the Senate increasing the OTP tax from 15% to 20% and the House keeping it at 15%. Our supporters in Annapolis are telling us they plan on leaving premium cigars alone during the Special Session, but there are no guarantees.
When compared to overall State taxes, the amount raised by increasing the tax on premium cigars is minuscule; however, when applied to us as a small business owners, and you as the customer, it is significant. As a percentage, the increase from 15% to 20% is over 33%. In addition, the policy arguments for high taxes on tobacco products, such as discouraging children to smoke, do not apply to premium cigars.
To make these points with legislators, we are suggesting that you send a respectful, appropriately worded request to at least one of the members of House and Senate Committees that consider tax policy for the State to leave the tax on premium cigars at it is. A number of them have already agreed to do so after hearing from us and other premium cigar retailers, but is necessary to reinforce our message now. A list of these legislators and their email addresses, together with their County of residence, is attached for your reference. Of course, if you already have a personal relationship with any member of the General Assembly, feel free to communicate with them as well.
We can be successful in avoiding this tax increase if our collective voices are heard. The first bill hearing begins this Monday morning, so please take a moment now to compose and send your request. Thank you for your consideration.
The Draper Boys
The contact list is available in a PDF format. To download a free copy of Adobe Reader see this link.