Aloha and welcome!
The Hawaii Cigar Association mission is very simple. We are a collective group of business owners, and consumers in Hawaii who both enjoy the pleasures of premium cigars, and who are dedicated to preserving the right to enjoy one of nature’s finest gifts. Premium cigars as we define them are cigars that are made entirely by hand of all natural tobacco leaf, hand-constructed and hand-wrapped, with no filter or characterizing flavor, and weighing more than four pounds per one thousand cigars. In other words, these traditional cigars are made for adults. And, they will no longer be confused with the candy and fruit flavored tobacco products targeting our youth.
Whether it be at social events, or through public advocacy , the Hawaii Cigar Association is an exclusive group that only welcomes like minded individuals. All members will share our concerns, opinions, and political goals.
Integrity has no need of rules. ~Albert Camus
I think that we should be men first, and subjects afterward. It is not so desirable to cultivate a respect for the law, so much as for the right. ~Henry David Thoreau
The Hawaii Cigar Association also serves as a link to other cigar associations around the world. Through these groups we are connected to an extended family of growers, manufacturers, retailers, consumers, and like minded individuals.
Legislative Action News
2016 Hawaii legislative Session
In total there are 7 cigar related bills that we are tracking during this 2016 Hawaii legislative session. They are as follows:
SB2135 A Senate bill that caps the tax on large cigars at 50 cents.
HB1634 A House bill that caps the tax on large cigars at 50 cents.
SB2134 A Senate bill that adds a new definition for premium cigar, and exempts premium cigars from the self service display ban.
HB1614 A House bill that adds a new definition for premium cigar, and exempts premium cigars from the self service display ban.
SB399 A Senate bill that defines premium cigar, applies a tax of 50 cents per premium cigar, and exempts premium cigars from the self service display ban. (Re-introduced from 2015 session)
SB400 A Senate bill that defines premium cigar, replaces large cigar with premium cigar, applies a tax of 50 cents per premium cigar, and exempts premium cigars from the self service display ban. (Re-introduced from 2015 session)
HB145 HD1 SD2 A bill that amends the definition of "tobacco products", to include any product containing nicotine, but not containing tobacco. Imposes an excise tax equal to % of the wholesale price of any tobacco product, other than large cigars, sold by a wholesaler or dealer on and after 1/1/2016, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer. Requires an unspecified amount of the moneys collected under the increased excise tax rate to be deposited to the credit of the Hawaii cancer research special fund. Amends the excise tax rate on the sale of large cigars beginning on and after 1/1/2016 to the lesser of cents for each large cigar or % of the wholesale price of each large cigar. (Re-introduced from 2015 session)
If you would like to learn more about our efforts to protect the cigar industry in Hawaii please do not hesitate to contact us.
May 6, 2015
Cigar Tax Cap Goes Up in Flames, Senate Leadership Topples!
On Friday, May 1st, with only thirty minutes remaining before the final decking of the 2015 Legislative season, HB145—a bill that included language to cap Hawaii’s cigar tax—was deferred in conference committee and, by this action, killed. Four days later, on May 5th, the Senate President was ousted. Here is a recap of what has become a three-year struggle by the Hawaii Cigar Association (HCA) and the Kauai Cigar Company to bring fairness and equality to the Hawaii tax code.
HB145 was introduced by Speaker of the House Joseph Souki, House Finance (FIN) Chair Sylvia Luke, and House Consumer Protection & Commerce (CPC) Chair Angus McKelvey. With House leadership pushing forth this measure, there was an air of optimism among all those seeking parity in Hawaii law. Senators Ronald Kouchi and Dr. Josh Green co-introduced a companion bill in SB401. Two other measures that sought a similar tax cap on cigars (but only on strictly defined “premium cigars”) were not taken up in committees; both of those measures were supported by the HCA.
It should first be noted that HB145’s companion bill, SB401, had a single referral to the Senate Ways and Means (WAM) committee, which is chaired by Senator Jill Tokuda. After receiving testimony from the Hawaii Department of Taxation, the bill language was cleaned up and given an effective date of December 31, 2015. On March 10th, SB401 passed the Senate by a vote of 23-2 with only two Senators opposing: Rosalyn Baker and Lorraine Inouye. SB401 ultimately stalled after the House CPC replaced the cigar tax cap language with a tax credit for qualified Hawaii cigar producers. More on the tax credit later.
HB145, on the other hand, began a long and convoluted path towards its ultimate death in the final hour of conference this session. Stating that he did not have the committee votes, CPC chair Angus McKelvey proposed a tax credit that would encourage and aid qualified Hawaii cigar producers that are at a competitive disadvantage because of the current 50 percent wholesale tax on large cigars. The new bill containing the tax credit language passed out of CPC and also passed out of FIN before heading for a final vote in the House. The qualified Hawaii cigar producer tax credit bill passed the House on third reading by a vote of 44-7, with Representatives Fukumoto Chang, Kobayashi, Ohno, Onishi, Rhoads, Thielen, and Tupola voting no. It should be noted that both the Hawaii Cigar Association and the Kauai Cigar Company continued to support a tax cap on cigars even after the proposed language was introduced. We maintain to this day that a tax cap would benefit everyone who does business in Hawaii.
Having passed the House, HB145 crossed to the Senate where opportunists were quick to act on the many concerns raised by the Department of Taxation and the Attorney General on the grounds that the bill was unconstitutional and legally flawed. The Senate Committee on Commerce and Consumer Protection (CPN), chaired by Sen. Baker, then gutted and replaced the entire contents of the bill and gave no consideration in her Senate draft (SD1) to the original bill language that contained a tax cap on large cigars. The language in the proposed SD1 contained an increase in tax from 70 percent to 80 percent on all other tobacco products (OTP), including a new tax on any product that contained nicotine (e-cigarettes), and directed the additional tax revenue to the University of Hawaii Cancer Research Center. It should be noted that during this hearing not one other member of the seven-member CPN committee was present for testimony, and it was only after several awkward moments alone that a vote was achieved by rounding up three other committee members from their offices.
With both opponents and proponents of the new bill language at odds with each other, the bill passed out of CPN and headed towards its final committee stop, WAM. Chair Jill Tokuda, in a bold and helpful way, re-inserted the original cigar tax cap language already passed by the full Senate in SB401. It should be noted that the integrity of Sen. Tokuda was on full display at this important hearing as she attempted to bridge a divide between two opposing sides. This one legislator did right by the people of Hawaii by staking a position that her fellow members of the Senate had already voted on. In addition, and to encourage further discussion, all tax percentages and cap numbers were removed so that the House and Senate could reach agreement in conference committee. The bill, with conflicting purposes at this point, became known as the “Frankenbill” among government lobbyists and watchdogs.
ref: GRASSROOT INSTITUTE OF HAWAII: Smoking Out a Frankenbill
Having reached conference committee on April 28th, and after reconvening seven times over a four-day period, the two sides of CPC and CPN reached an undisclosed agreement on the bill language. All that was needed was a release from FIN and WAM chairs. At 5:15 p.m. on May 1st, with time running out, the FIN failed to release the bill as a result of House Higher Education chair Rep. Isaac Choy blocking any money derived from the bill from going to the University of Hawaii Cancer Research Center. The Center has come under recent criticism by lawmakers for mismanagement and misuse of public funding.
ref: KHON2: Report highlights UH Cancer Center struggles
Without a deal to fund the failing research center, Sen. Baker refused to allow the bill to pass out of conference. It should be noted that the Cancer Center has seen a dwindling of money as a result in the decline of cigarette tax revenue from twenty million dollars to fourteen million dollars annually and the recent ending of federal money.
With all that was lost in year three of this struggle, a major political power shift occurred within the Hawaii Senate. As reported on May 5, 2015, Senator Ronald Kouchi of Kauai seized the presidency from Donna Kim. For all those who love and enjoy cigars in the Aloha State, we feel confident that year four will bring success for tax parity on premium cigars.
ref: HONOLULU CIVIL BEAT: Kouch Takes Gavel as New Senate President After 'Bloodless Coup'
The HCA still supports the definition of a premium cigar as being a cigar that is wrapped in whole tobacco leaf; contains a 100 percent leaf tobacco binder; contains primarily long filler tobacco; is made by manually combining the wrapper, filler, and binder; has no filter, tip, or non-tobacco mouthpiece and is capped by hand; does not have a characterizing flavor other than tobacco; and weighs more than six pounds per thousand units. The HCA will continue to seek exclusion from FDA regulations and support the fair treatment of cigars under Hawaii law.
Feb 28, 2015
Two cigar tax bills are up for hearing this week
The 2015 Hawaii Legislative Session is now moving fast in both the House and the Senate prior to the first cross over.
Two cigar tax bills are up for hearing this week. At 9AM on Tuesday, March 3, 2015 the Senate Committee on Ways and Means (WAM) will hear SB401, a bill that places a tax cap of fifty cents on all large cigars.
At 11AM on Wednesday, March 4, 2015 the House Committee on Finance (FIN) will hear a version that originally contained matching language to SB401, a bill that places a tax cap of fifty cents on all large cigars. The new language in HB145 HD1 relates to a tax credit for qualified cigar producers in Hawaii.
We all acknowledge that mail order cigar sales go untaxed, and a change in the law would allow local businesses, and consumers to keep our dollars here in Hawaii.
We kindly ask that you read, and offer your SUPPORT or comments on these two measures up for hearing. Testimony must be submitted no later than 9AM on Monday for SB401, and no later than 11AM on Tuesday for HB145 HD1.
You may track and submit testimony in SUPPORT of these measures by clicking the following links:
SENATE BILL SB401
HOUSE BILL HB145
Your testimony plays a pivotal role in the process. If you have any questions, or comments prior to your involvement please feel free to email, or call us at 808-822-4495. The HCA will be at the Capitol on both Tuesday and Wednesday.
Help Exempt Premium Cigars From FDA Regulation!
H.R. 662 / S. 441 - A bill to clarify the FDA's jurisdiction over certain tobacco products
With the close of the comment period on the FDA's proposed deeming rule to regulate premium cigars, it's incumbent upon the cigar enthusiasts of the United States to voice their opposition to the proposed regulation of premium cigars by contacting your Members of Congress to ask for their support of H.R. 662 and S. 441.
H.R. 662 and S. 441 have been filed in both the U.S. House of Representatives and the U.S. Senate under the banner "To amend the Federal Food, Drug, and Cosmetic Act to clarify the Food and Drug Administration's jurisdiction over certain tobacco products, and to protect jobs and small business involved in the sale, manufacturing and distrubtion of traditional and premium cigars." This bi-partisan legislation would protect premium cigars from FDA regulatory authority. This legislation will have a profound impact on protecting the industry, from the fields and factories of Central America to the supply-chain throughout this nation, to the community tobacconist, to enjoying a cigar in the local shop, club or back porch.
Take action now and respectfully ask your Member of Congress to co-sponsor H.R. 662 and S.441.
Jan 26, 2015
Hawaii Legislative Session has begun
We all acknowledge that mail order cigar sales go untaxed, and a change in the law would allow local businesses, and consumers to keep our dollars here in Hawaii.
June 1, 2014
FDA Update on Premium Cigars; Hawai‘i Cigar Tax Cap
Aloha Hawaii Cigar Association members and supporters of premium cigars!
The 2014 Hawai‘i legislative session has ended, and again Hawai‘i’s premium cigar industry has been denied parity and fairness in the state’s tax code. In 2013 the state Senate passed a cigar tax cap bill (SB188) on premium cigars by a vote of twenty-four to one. This year the House passed its own version of a tax cap (HB1849), which included all large cigars. Surprisingly, Senate Ways and Means chair David Ige deferred the bill indefinitely, with neither a vote nor a public hearing. Prior to the deferral, the bill had been amended and sent to the Senate Committee on Health. Amendments included striking the $.50 tax cap on all large cigars and leaving the tax amount open for further debate. A second amendment would have added language exempting premium cigars from the self-service display ban set to go into effect July 1, 2014. But rather than amending the bill, as the Attorney General’s office suggested, or sending it to conference committee, Senator Ige deferred it, thus killing any hope of its passage this year. This was certainly unexpected, because last year Senator Ige had supported a $.50 tax cap on premium cigars.
Regardless, the HCA would like to thank legislators on both sides for moving us closer to solving the tax disparity on premium cigars and for supporting those of us who create local jobs, support our communities and assure tax revenue for Hawai‘i. Sixty out seventy-six state legislators support a tax cap on cigars, and we are confident that a compromise can be reached in 2015; we believe that lawmakers will pass legislation that benefits local industry and satisfies those who desire fairness in the law.
We would again like to thank those legislators who have supported our cause over the last two years.
Thirty-six of fifty-one House members voting aye for HB1849 and a $.50 per large cigar tax cap in the 2014 session:
Henry Aquino, Karen Awana, Della Au Belatti, Tom Brower, Rida Cabanilla, Romy Cachola, Mele Carroll, Isaac Choy, Denny Coffman, Ty Cullen, Cindy Evans, Richard Fale, Mark Hashem, Linda Ichiyama, Jo Jordan, Derek Kawakami, Chris Lee, Nicole Lowen, Sylvia Luke, Bob McDermott, Angus McKelvey, John Mizuno, Dee Morikawa, Mark Nakashima, Scott Nishimoto, Richard Onishi, Karl Rhoads, Scott Saiki, Calvin Say, Joseph Souki, Mark Takai, James Tokioka, Clift Tsuji, Justin Woodson, Ryan Yamane and Kyle Yamashita.
Twenty-four of twenty-five Senate members voting aye for SB188 and a $.50 per premium cigar tax cap in the 2013 session:
Rosalyn Baker, Suzanne Chun Oakland, Donovan Dela Cruz, Kalani English, Will Espero, Mike Gabbard, Brickwood Galuteria, Josh Green, MD, Clayton Hee, David Ige, Les Ihara, Gilbert Kahele, Gilbert Keith-Agaran, Michelle Kidani, Donna Kim, Ronald Kouchi, Clarence Nishihara, Russell Ruderman, Maile Shimabukuro, Sam Slom, Malama Solomon, Brian Taniguchi, Laura Thielen, Jill Tokuda and Glenn Wakai.
In response to the US Food and Drug Administration’s 241-page document of proposed tobacco regulations released last April, the HCA visited Washington, DC to share our views. Sens. Mazie Hirono and Brian Schatz joined Rep. Colleen Hanabusa in supporting the premium cigar industry by sponsoring Cigar Rights of America’s legislative efforts in S772 and HR792. Both Sen. Hirono and Rep. Hanabusa have stood by the HCA and CRA since day one of this effort, which began two years ago. Their sponsorship of these bills was a vote for small businesses and job protection. It also sent a message to the FDA that America’s cigar tradition should not be regulated out of existence, particularly because that tradition poses little to no threat to our nation’s youth. The HCA is deeply grateful for their support and willingness to compromise.
left: Senator Mazie Hirono, middle: Senator Brian Schatz, right: Congresswoman Colleen Hanabusa
If adopted, option two of the FDA report would exempt premium cigars from further FDA regulation. During the seventy-five-day public comment period allowed by the FDA, it is critical for premium cigar consumers, retailers and manufacturers to voice their support for such an exemption. Members of the public can share their comments by visiting the CRA web site at http://cigarrights.org/fda-response.php. Manufacturers and retailers can visit the International Premium Cigar & Pipe Retailers Association can voice their opinion by visiting http://www.ipcpr.org/?page=LegislativeActionCen. For more information about these legislative efforts, please visit the Hawaii Cigar Association’s web site. Be sure to voice your opinion by July 9, 2014! The letters below were recently submitted to members of Congress and the FDA on behalf of the HCA.
The Hawaii Cigar Association will keep the public up to date on all matters relating to state and federal matters relating to premium cigars.
State of Hawaii "premium cigar" flat rate tax bill SB188
Premium cigars as we define them are cigars that are made entirely by hand of all natural tobacco leaf, hand-constructed and hand-wrapped, with no filter or characterizing flavor, and weighing more than four pounds per one thousand cigars.
|Hawaii Cigar Tax Petitions Signed||893|
|Hawaii Supporting Businesses||211|