S-CHIP Required Reading

[floydpink]

How will this affect overseas purchases, if at all?

I absoluetly "Love" (Dripping with Sarcasm) How the hardest hit from this is the demographic that likely can withstand this increase the least!

People that roll your own, typically speaking, are the lower middle to lower income tax bracket folks that are least equiped financially to afford that type of tax increase.

God I hate what our Government "Of the People, for the People" is doing to the very constituents it claims to "Serve" (Dripping with Sarcasm yet again!)

Our founding fathers unquestionably are rolling over in their graves in dismay to what this land has become!

Morte a Tyrants

[Buena Fortuna]

Originally Posted by PaleRider

I absoluetly "Love" (Dripping with Sarcasm) How the hardest hit from this is the demographic that likely can withstand this increase the least!

People that roll your own, typically speaking, are the lower middle to lower income tax bracket folks that are least equiped financially to afford that type of tax increase.

God I hate what our Government "Of the People, for the People" is doing to the very constituents it claims to "Serve" (Dripping with Sarcasm yet again!)

Our founding fathers unquestionably are rolling over in their graves in dismay to what this land has become!

Morte a Tyrants

AMEN!

[Snake Hips]

Originally Posted by floydpink

How will this affect overseas purchases, if at all?

Depends on what you mean...certain overseas purchases aren't affected at all anyway, but often the tax is the replacement of your purchase with an awesome letter from the Treasury Department...

[Totemic]

Ok, how about cigars grown, produced and distributed from some other non-Cuban nation with zero presence in the US?

They shouldn't be subject to these taxes no?

[Snake Hips]

Originally Posted by Totemic

Ok, how about cigars grown, produced and distributed from some other non-Cuban nation with zero presence in the US?

They shouldn't be subject to these taxes no?

I wouldn't think so, but I'm finding the probability that that they would let that be exempt unlikely. Just as you're supposed to declare out-of-state purchases for your state taxes, I suppose you'll be responsible for declaring out-of-country purchases on your federal/state taxes, like the Canadians. But I was making a joke, because I wasn't familiar with any "overseas purchases" of a non-Cuban nature...

@alley00p
The "bulk cigarette tobacco" tax hike is for roll-your-own. I assume this was a "compromise" with Big Tobacco for the comparative leniency on the tax hike for manufactured cigarettes. People won't stop buying cigarettes for a dollar more per pack; I see people buying Marlboro reds for $4.60 a pack, when the place down the street has Davidoff cigarettes for $1.68 a pack. However, the roll-your-own guys will likely be jived out of their thing with that tax increase; one of the perks of RYO was its thrift...$40 for a $15 bag of tobacco, might as well just go get a carton of Pall Mall Unfiltered and be done with it...

[Totemic]

Originally Posted by Snake Hips

But I was making a joke, because I wasn't familiar with any "overseas purchases" of a non-Cuban nature...

Actually, I wasn't joking.

For example, tabacordillera.com is a cigar company that I believe is located in Costa Rica producing among other blends, Cumbres de Puriscal blend.

If I order from them, I'm curious as to how the taxes apply. Right now, if I order from them, I don't think I have to pay any federal excise tax (unless the prices include the excise tax already--which doesn't make sense for a Costa Rican outfit to be paying US federal taxes), not even the $0.05/cigar tax that's currently on the books.

Because if it is the case that non-US cigar producers/distributors aren't required to pay this stupid tax, I would imagine a sudden out sourcing of cigar distribution from the US to various parts of the world like Nicaragua, Honduras, Costa Rica, etc... Of course, it would hurt the major retailers like Famous and CI not to mention absolutely killing off what remains of the B&Ms.

[Buena Fortuna]

This is an update from my local B&M


A Cigar Tax Update
Following a long, drawn-out political fight started in 2007, President Obama signed into law the State Children's Health Insurance Program (SCHIP) renewal and expansion.
The new federal excise tax rates to take affect April 1, 2009 are as follows:
Cigarettes $1.0066/pack
Large cigars 52.75% (capped at 40.26 cents per cigar)
Snuff $1.51/lb.
Chew $.5033 cents/lb.
Pipe tobacco $2.8311/lb.
RYO $24.78/lb.
Little cigars $50.00/1,000
Note - While the new law says that the increase is capped at .4026 cents per cigar....Don't fool yourself! State OTP Taxes are added onto this increase! As an example, in Michigan the actual increase is .5314 cents per cigar. On top of the actual increase, manufacturers, wholesalers, and yes retailers will have to take an increase to maintain their gross margins. My guess is that the cigars will go up an average of .75 cents each and by $15 per box by the time it is all done!
While the tax goes into effect April 1, as I predicted the manufacturers responded by immediately raising prices on all Machine Made Cigars and many of the Premium Cigars. The increase was between 8% & 15% and was effective February 4th to the 9th. So our costs are ALREADY UP WHEN WE ORDER FROM OUR SUPPLIERS!
I fully expect an additional price increase before March 15th, of about the same amount. These increases along with the increase taken last September by the manufacturers will allow them to not increase their prices beginning April 1st or if they do, by a very small amount!
It is our intent to continue to give our customers an opportunity to purchase product before we raise our prices over the next few weeks.

ANNOUNCING....THE LAST CHANCE SALE!
On Saturday February 7th will we launch our week long PRE - SCHIP TAX promotion. In addition to continuing to sell all of our cigars at the old prices, we will be offering SPECIAL PROMOTIONS to help you afford to stock up before we raise prices beginning February 15th.
This is an unprecedented event that puts the entire burden of funding Health Care for Children on the backs of those that use Tobacco! While it provides funding for 100% of the low income Children, it is funded by less than 25% of the population that uses tobacco. THIS IS UNFAIR...BUT IT IS DONE!
I would like to thank everyone that did their part contacting elected officials over the past 3 years as we fought this battle. Today it is the smokers that are taking it on the chin....tomorrow it will be the Beer Drinkers, French Fry Eaters, Soda Drinkers and more. BE PREPARED...at some time the apathetic American People will say enough is enough!THE GREAT AMERICAN TAX REVOLT IS COMING! Our forefathers did not stand by idly while their government put unbearable taxes on them....THEY THROUGH THE TEA IN THE HARBOR!
We promise to continue to do our part in keeping Cigars as affordable as possible to our customers through The Cigar Factory Outlet! We will continue to enjoy our events and comradery at any price! Thanks for your continued business.
Dan Jenuwine
Troy, MI 48083

[alley00p]

I talked to my B&M owner a couple days ago; he mentioned for the first time, Fuente/Newman has discontinued the practice of "requiring" B&M's order a lot of sticks that they know they won't be able to move. Now, he can pick and choose for the first time since he's been in business (no more boxes of "curly heads" as part of his order )!

The other thing is that the "bulk cigarette tobacco" tax was slated to rise from about @$1.50/lb to $24.00/lb. Even a lot of Democrats are realizing that this would bankrupt the domestic cigarette industry. The number of layoffs in that industry might drawf the crap that has happened in the auto industry! According to a friend, he interviewed an "unnamed source" who said that this is one of the things that is holding S-CHIP up right now.

Who knows what will happen?

[BarneyBandMan]

Originally Posted by alley00p

I talked to my B&M owner a couple days ago; he mentioned for the first time, Fuente/Newman has discontinued the practice of "requiring" B&M's order a lot of sticks that they know they won't be able to move. Now, he can pick and choose for the first time since he's been in business (no more boxes of "curly heads" as part of his order )!

Yeah, my B&M guy told me the same thing. He said all he had to do was pick up the phone now and order whatever boxes he needed. So I asked him to pick up the phone and order a couple boxes of 858 Sungrowns. He chuckled and picked up the phone. They chuckled and hung up.