Rhode Island and Alaska Close Their Legislative Sessions with Mixed Results for Premium Cigars

As several state legislatures conclude their 2026 sessions, recent developments in Rhode Island and Alaska underscore the importance of continued engagement on issues affecting premium cigars. While Rhode Island lawmakers ultimately rejected a significant tax increase on premium cigars, legislation in Alaska that would have authorized qualifying retail cigar lounges was vetoed for reasons unrelated to the premium cigar provisions.

Rhode Island Budget Signed Without Premium Cigar Tax Increase

Rhode Island lawmakers concluded the 2026 legislative session with a positive outcome for the premium cigar industry after removing a proposed increase to the state’s premium cigar tax cap from the final fiscal year 2027 budget.

Earlier versions of the budget would have increased the state’s per-cigar tax cap from $0.50 to $2.00. However, during budget negotiations, lawmakers removed the premium cigar tax provision before final passage. The General Assembly subsequently approved the budget, and Governor Dan McKee signed it into law without the proposed tax increase.

The removal of the tax increase preserves Rhode Island’s existing premium cigar tax structure and represents an important victory for premium cigar manufacturers, retailers, and consumers.

Alaska Governor Vetoes Bill Containing Cigar Lounge Provisions

On June 20th, Alaska Governor Mike Dunleavy vetoed House Bill 24, legislation that included provisions authorizing qualifying retail cigar stores to permit on-site cigar smoking under specified conditions.

Importantly, the Governor’s veto was not directed at the premium cigar provisions contained in the bill. Instead, Governor Dunleavy cited concerns with other portions of the legislation, including new taxes on electronic smoking products, expanded regulatory requirements for retailers, and increased costs for consumers and small businesses. He also indicated that his administration would support future legislation focused on preventing youth access to tobacco and nicotine products without imposing additional taxes or regulatory burdens.

Although House Bill 24 ultimately did not become law, the Governor’s veto message makes clear that the premium cigar provisions were not the basis for his decision.

Closing

As legislative sessions continue to conclude around the country, these developments highlight both the opportunities and challenges facing the premium cigar industry. While Rhode Island’s rejection of a significant tax increase represents an important victory, Alaska demonstrates that even positive legislation can be affected by broader policy debates unrelated to premium cigars.

CRA will continue working with lawmakers, coalition partners, and grassroots advocates to oppose harmful legislation, support policies that recognize the unique nature of premium cigars, and ensure the industry’s voice is heard in state legislatures across the country. As always, we will keep members informed as new developments arise.