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News Blog

Tobacco Tax Looms

by Clayton Norlen
Posted // 2010-03-03 -

Sniff it, smoke it, chew it — however it is ingested legislators want a larger cut in tobacco products.Gary Klc, owener of Jeanie's Smoke Shop
Monday Utah House members gave a nod to raising the state tax by $1 a pack. Any revenues collected will be going towards filling the states deflated budget, with a small portion earmarked for Gold Medal School programs housed in the Department of Health. While many Republicans at the capitol are hesitant towards tax hikes, smokers and tobacco enthusiasts of all stripes have gripes.

Gary Klc, owner of Jeanie's Smoke Shop in Downtown Salt Lake City said if the proposed tax increase takes effect customers can expect his and other smoke shops to get out of the game.

"Look for me to go out of business if this all goes through, and that is all the state wants," Klc said. "If both the state and federal tax get raised we're pretty much screwed."

H.B. 196 sponsored by Rep. Paul Ray R-Clearfield would impose a tax increase of 35 percent on the manufactures sell price on all tobacco products, except moist snuff, a .75 cent or $1.83 per ounce tax would be tacked on. Both, increases that Klc said will have to be passed onto consumers.

In 2009, Adam Smith, former owner of This is the Place Smoke Shop was forced to close his store after state and federal tax increases went into effect. He said the costs of keeping products in stock were too exorbitant and his tobacco didn't leave the shelves before the bills arrived.

"I started smoking in the military, it was the only way to get a break," Smith said. "The government hooked me and now they are screwing me."

According to the fiscal note attached to H.B. 196, tobacco retailers are expected to see a decrease of revenue of about $54 million annually, if the bill is signed into law. The predicted increase of revenue entering the General Fund from the proposed increases would be about $43 million in the 2011 fiscal year.

Klc said that each increase creates a drop in the number of smokers and because of that the revenues generated from a tax increase stay the same.

"If they're trying to fill budget holes it is not going to happen this way," Klc said. "This is just an attempt to get tobacco out of the state."
Max Taylor, a student at the University of Utah began smoking cigarettes some six-months ago. He prefers Parliament Lights, but at around $6 a pack he isn't thrilled about the price.

"I started working at a bar and a lot of my co-workers smoked," Taylor said. "I got sucked in. It's a pretty stressful environment and smoking is a nice break after last call. Helps us all relax."

Despite potential tax increases, Taylor said he doesn't expect any change to his habits.

"I like smoking, and people are going to regardless," Taylor said.

Potential benefits legislators see in increasing the tax are possible health advantages for citizens, however, said Amy Watkins, of Salt Lake City. If better health is the goal, she said, fast food and sugar products should be targeted as well.

"I didn't think it was the government's role to regulate taxes. I thought the legislature was all Republican," Watkins said. "If they really cared about health they would tax fast food and that. Obesity is the leading killer in the United States. Tax by the pound." 

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REPLY TO THIS COMMENT
Posted // March 7,2010 at 03:29

As I sit here Dying from 3 Dfferent Lung Diseases,

I would like the Government to eliminate smoking altogethe,

r and find a different way to copulate the indecency of robbing the public of much needed funds

 

 
 
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