Excise tax on remote cigar sales approved

Lawmakers passed a bill Feb. 5 intended to help Nebraska cigar shops compete with online retailers.

The state excise tax on cigars currently is 20% of the purchase price paid by the first owner or the price at which the first owner who made the products sells them to others.

LB212, introduced last session by Fremont Sen. Dave Wordekemper, requires remote retail sellers to collect and remit the 20% excise tax on products sold directly to Nebraska consumers if they meet certain sales thresholds.

The requirement applies to “covered tobacco products” — like cigars and pipe tobacco — but not snuff, chewing tobacco or electronic nicotine delivery systems.

The bill also requires remote retailers of covered tobacco products to apply for a license from the state tax commissioner. License holders must submit monthly tax returns and keep accurate sales records.

The new requirements take effect Jan. 1, 2027.

LB212 passed on a vote of 49-0.