Death of Retail Cigar Stores in California?

From Rich Perelman at CigarCyclopedia:

A looming time bomb is ticking, which if it explodes in November, may close many of the retail tobacco stores in the state of California.

It goes by the name of “The Tobacco Tax Act of 2006.”

The latest initiative to come from the anti-tobacco lobby, this bill seeks primarily to raise the tax on cigarettes by 13 cents apiece or $2.60 per pack. The state already has an 87 cents per pack tax and the resulting $3.47 per pack rate would be the highest in the nation.

The measure creates a “Tobacco Tax of 2006 Trust Fund” in the state treasury, which in turn will fund a variety of health programs such as research and a variety of anti-tobacco advertising and promotional ventures for state and local government use.

But the insidious nature of this proposition is that California is the only state which links its tax on cigarettes to what are known as “other tobacco products” (“OTP”). These include cigars, pipe tobacco, smokeless, little cigars and roll-your-own cigarettes. It is this aspect of the proposition which will destroy California’s smokeshops. While the tax rate is not specified in the proposition, the state’s Board of Equalization would be required to impose a tax rate “equivalent” to the rate on cigarettes.

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