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Tobacco tax could cripple Tampa's cigar industry
The United States Senate is working on a tobacco tax that some experts say could devastate Ybor City's cigar industry.
Lazaro Rodriguez, the owner of the "Havana Dreams Cigar Factory" in Ybor City, said his company routinely hand rolls about 1,000 cigars a day.
"Business is going good," said Rodriguez. "Matter of fact, we plan to expand more cigar-rolling stations here in the factory. We hire almost 20 new people."
But those expansion plans could be in jeopardy.
If the federal government raises the tobacco tax, which it is expected to do, cigar prices would rise sharply.
The federal tax would be raised from 4.8 percent to 53 percent. So for example, the tax on the cost of a $10 cigar would go from 5 cents to more than $5.
And with more cigars manufactured or imported through Tampa than anywhere else in the country, a cigar tax would hit the area's cigar industry hard.
Congress has sought an extra $35 billion to pay for the state's children health insurance program. Cigarette taxes have been used to pay for the program, but now legislation has lumped in cigars.
There is no timetable on when the tax may or may not be passed. Cigarmaking still employs more than 1,000 people in Tampa.
"This federal tax can kill the cigar industry in Tampa," Rodriguez said.
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