Mississippi Bill Proposes 22.5% Cigar Tax Increase

Mississippi lawmakers are again debating a significant tax increase on cigars. A new proposal would raise the state’s cigar tax by 50 percent. Retailers and consumers would feel the impact quickly if it becomes law.

Details of the Proposed Tax Increase

H.B. 758 would raise the cigar tax rate in Mississippi from 15 percent to 22.5 percent. The tax applies to the wholesale price. The bill includes no cap.

According to industry estimates, the change would push up shelf prices. A cigar with a $9.50 MSRP currently costs about $10.21 before sales tax. Under the new rate, that same cigar would rise to roughly $10.57. Small increases add up fast for regular smokers.

What Products the Bill Covers

The legislation targets more than premium cigars. It covers all tobacco products other than cigarettes. Heated tobacco products also fall under the proposal.

That broad scope means the bill would affect cigar shops, convenience stores, and other tobacco retailers. Consumers across several product categories would see higher prices.

No Cap Raises Industry Concerns

Many states apply a cap to cigar taxes. Caps help protect premium cigars from steep price jumps. H.B. 758 does not include such a safeguard. As cigar prices rise, the tax burden would climb alongside them.

Retailers often warn that uncapped taxes hurt small businesses most. Online and out-of-state purchases also tend to increase after tax hikes.

Who Introduced the Bill

Democratic state representative Bob Evans introduced H.B. 758. He represents Monticello. Evans also filed a separate bill aimed at raising the state’s cigarette tax.

Evans has pushed for higher tobacco taxes for more than ten years. None of his earlier efforts passed into law. This proposal continues that long-running campaign.

Timeline for Implementation

If lawmakers approve the bill, the new tax rate would begin on 1 July 2026. That start date gives retailers some time to prepare. It also leaves room for amendments as the bill moves through committee.

For now, the proposal signals renewed pressure on cigar pricing in Mississippi.