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XT 2017-03 – Other Tobacco Products Tax – Premium Cigars – Issued July, 2017

The 132nd Ohio General Assembly recently passed Amend. Sub. House Bill No. 49, which establishes a new category of product--premium cigars--and includes a cap on the other tobacco products (“OTP”) tax paid on each “premium cigar” effective July 1, 2017. The maximum OTP tax amount is $.50 per premium cigar.  

Amend. Sub. H.B. 49 amends R.C. 5743.01 and adds the following definition of “premium cigar”:

(Q) "Premium cigar" means any roll for smoking, other than cigarettes and little cigars, that is made wholly or in part of tobacco and that has all of the following characteristics:

(1) The binder and wrapper of the roll consist entirely of leaf tobacco.

(2) The roll contains no filter or tip, nor any mouthpiece consisting of a material other than tobacco.

(3) The weight of one thousand such rolls is at least six pounds.

The bill also establishes a maximum tax amount of $.50 per premium cigar which will be adjusted annually in April of each year based on the consumer price index. Any increase will be effective for the subsequent July 1st through June 30th period and will be posted on the Department’s website.

Therefore, effective July 1, 2017, the OTP tax on each cigar that qualifies as a premium cigar shall be the lesser of 17% or the maximum tax amount of $.50 per cigar.  In response to the statutory change, the Department will make available on its website an updated OTP tax return for the timely filing of the returns due for the July 2017 period (August 23, 2017). In addition, the Department will be updating the FAQs on its website to provide further guidance regarding this change.

Please contact us at the address or phone number below with any questions:

Ohio Department of Taxation
Excise and Energy Tax Division
P.O. Box 530
Columbus, OH 43216-0530
Telephone: (855) 466-3921, option 3
Fax: (206) 350-6722
Website: tax.ohio.gov