The True Story of the March Madness Sale : A Two Guys Story : Once upon a time—well, back in February of 1997—Two Guys Smoke Shop got hit with a tax bombshell. Dave Garofalo and his brother John were happily running their cigar business in New Hampshire, enjoying the sweet aroma of success, when their accountant dropped a number on them that made their cigars almost fall right out of their mouths.
$103,000 in taxes. EACH.
“Wait… WHAT?” Dave probably shouted, nearly choking on his own disbelief. It made no sense. He and his brother were only making $26,000 a year, getting by on a meager $500 weekly paycheck like regular employees. Taxes came out of their paychecks like everyone else, the business paid its quarterly dues—so how in the name of Atabey did they owe such an outrageous sum?! Well, it turns out the villain of this story wasn’t some evil tax collector but something far more familiar — inventory.
As an S-Corp, Two Guys Smoke Shop itself didn’t technically pay taxes. Instead, its earnings “passed through” to the owners, who had to report them on their personal tax returns. The catch? Every year, they stocked more cigars than the last. More inventories meant lower Cost of Goods Sold (COGS), which meant higher taxable income—on paper. But paper profits don’t pay taxes, and cash was the only thing the IRS would accept.
So, there they were, faced with the impossible: a six-figure tax bill and no way to pay it. What were they supposed to do? Sell a kidney? Flee the country? Maybe open a lemonade stand in front of the shop?
Enter the accountant, the unsung hero of this tale. He had a crazy idea—one that would go down in cigar history.“Turn inventory into cash. Have a MASSIVE sale.” Dave blinked. “That’s what I try to do every day.”
“No, no, no. I mean a BIG sale. One-day only. Mark things down like crazy, get rid of old stock, move product fast, and generate the cash you need in a single day.” So, they did it. They stayed open until midnight, slashed prices, and people swarmed the shop. By the end of the night, they had raked in nearly $200,000—enough to cover their taxes and then some.
Crisis averted. The next morning, Dave took a deep breath and said, “Well, that won’t happen again.” But it did.
Every single year since then, cigar lovers from all over have made the pilgrimage to Two Guys Smoke Shop in Salem, New Hampshire, on the first Friday of March for what became known as the March Madness Cigar Sale. Online? Nope. This is an in-person, grab-it-while-you-can event, where everything is at least 20% off, with some deals going up to 50% or more. Humidors, lighters, cutters, cigars—it’s all fair game.
Rain, shine, snowstorm — nothing stops the crowd. Over 1,000 cigar fanatics pack the store every year, digging through boxes, hunting for rare finds, and grabbing the best deals before someone else does. It’s a cigar lover’s Black Friday, a feeding frenzy of smoke and savings.
And the best part? The very next day, business goes right back to normal. Customers return, cigars keep selling, and Dave gets to breathe easy—at least until next tax season rolls around.
So, if you ever find yourself in New Hampshire on the first Friday of March, you know where to be. But get there early—because in the world of cigars and savings, the madness is very, very real.
The 2025 March Madness Cigar Sale will be held on Friday March 7, 2025, at Two Guys Smoke Shop, 304 South Broadway, Salem NH. Doors open at 10am and close at 6pm – One Day Only.
