Some business owners worry the state tax increase, coupled with a federal tax increase on tobacco products, will put them out of business. Greg McGee has worked at the Pipe and Tobacco Shop for 20 years. He calls the state’s tobacco tax hike “excessive” and he worries his store will eventually close because of smaller profit margins.
He says the federal tax increase, to fund the SCHIP program, dramatically increased their costs. The federal tax hike included a 62 cent increase per pack of cigarettes. It also increased taxes on other products, like loose tobacco for customers who roll their own cigarettes.
“That…tax went from over $1 per pound to over $24 per pound of tobacco. It raised the rax over $23,” McGee said.
Now his business and customers are facing another tax hike with the state tobacco tax hike. The state increase raises the price per cigarette pack by 56 cents. It also increases the tax on other tobacco products.
“That all went up from 32% to 68%. That doubled the tax, and the SCHIP raises the cost considerably,” McGee said.
The state tax hike will fund a statewide trauma system and other healthcare initiatives.
“Our business will hurt badly,” McGee said. “Can you ask a customer paying $5 for a cigar to pay $8, once you pay for shipping and taxes?”
Even some employees are considering cutting back.
“Actually, I plan on quitting,” clerk Michael Cia said. “I have a good stock at home but I plan on quitting purchasing.”
McGee thinks some customers will cross state lines to buy tobacco products where the taxes are not as costly. He worries that their store will close.
“This is almost imminent that it could happen. We’re worried about it,” McGee said.
The Arkansas tobacco tax hike needs Governor Beebe’s signature before it will become law on March 1.
The author of this article is:
cigarettes-blog[dot]com
buy-euro-cigarettes[dot]com
discount-euro-cigarettes[dot]com
More about cigarettes:
Tags: Businesses, Could, Hurt, Tobacco
