Nebraska lawmakers are considering LB1238, a bill that would raise the state excise tax on premium cigars from 20 percent to 30 percent. That is a 50 percent tax increase on cigars, and it would hit small businesses, consumers, and local economies hard.
This proposal would make Nebraska less competitive with neighboring states, drive consumers across state lines or into the illicit market, and reduce foot traffic to local cigar retailers. Premium cigars are a discretionary, adult product. History shows that excessive tax hikes do not increase long-term revenue. They simply push sales elsewhere.
Cigar shops are small businesses. They employ local workers, pay rent, collect sales taxes, and support surrounding restaurants and retail. LB1238 threatens that ecosystem for marginal short-term revenue gains that are unlikely to materialize.