Cigar Dealers sue City of Baltimore over Tax
Nine cigar and wholesale tobacco companies in Maryland sued Baltimore yesterday to block a new cigar tax from taking effect July 1.
The suit challenges legislation passed by City Council in December that will impose a levy of 18 cents to 36 cents on each cigar sold by wholesale tobacco dealers in the city. The bill originally targeted tobacco shops and pipe and chewing tobacco. Those businesses were cut from the measure after owners complained that the tax would wipe them out. A provision in the city law repeals the cigar tax when a 30-cents-a-pack increase in the state's cigarette tax -- now 36 cents a pack -- kicks in next year. Tobacco wholesalers say they want the city tax eliminated now because it conflicts with state law and pre-empts the changes due in state law next year. The lawsuit, filed in Baltimore Circuit Court, also contends that the city has no authority to impose the tax on an industry regulated by the state.