Will tobacco stores get burned by state cigarette tax increase? - WLOX.com - The News for South Mississippi

Will tobacco stores get burned by state cigarette tax increase?

By Trang Pham-Bui - bio | email

BILOXI, MS   (WLOX) - Elvis Fayard's convenience store in Biloxi offers deli food, groceries, gas, and cigarettes.  He says it was no surprise that the state legislature decided to raise the tax by 50 cents a pack on all brands of cigarettes.

"They like to tax. No tax is a good tax.  That's what I think about it. There's other ways to generate funds and I think them going after smokers is not a good thing," said Elvis Fayard.

Fayard says it's too early to tell if the proposed tax hike will hurt his cigarette sales.   

"Not a clue how it's going to go," said Fayard.  "I know it's going to hurt people.  Like if they smoke 10 packs a week at $5.00 a pack, that's $50.00.  That's a lot of money."

The tax would be another hit for smokers.  Just a month ago, the federal tobacco tax increased by $6.00 a carton.  If smokers have to pay an extra $5.00 a carton in state taxes, that means they would end up paying $11.00 more per carton. 

The manager of the Tobacco Shack in D'Iberville has been hearing plenty of complaints from customers about having to pay more to light up.

"We hear a lot of them talking about switching to different brands, cheaper brands," said Angie Woods.

And she says smokers are stocking up on their favorite brands now, before the tax goes up.

"Oh yeah. Notice we're out of a lot of our brands. You can't even get them from the company right now, because they're running out of it," said Woods.

Some store owners say smokers may try to find other ways to avoid paying higher taxes, like buying cigarettes over the Internet, on military bases, even crossing state lines.

"Because they say their taxes aren't as bad as ours when ours goes up," Woods said. "They're talking about going to Louisiana or Tennessee or Alabama."

Even though he sells tobacco products, Elvis Fayard hopes higher taxes will force smokers to cut down on cigarettes. That's because Fayard, who's been smoking since he was a teenager, quit cold turkey six months ago.

"I didn't do it because of the price," said Fayard. "I quit because I wanted to see my grandchildren grow up."

State lawmakers expect the cigarette tax to generate at least $100 million a year. The money would replenish a fund that helps lower car tag costs and help pay for other state services.

©2009 WLOX. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Powered by Frankly