US: Minnesota Cigarette Tax Costs Small Businesses a Loss of Customers

Source from:  KSFY 10/14/2013

Smoking has become an expensive habit in Minnesota.

And for some, a hard habit to break.

The state's new cigarette tax, which was designed to raise money, is causing some area businesses to lose money.

The state put the new tax into effect just a few months ago.

In that short time, some businesses have seen a drop in customers and they say it's hurting their bottom line.

Bob and Steve's Shell gas station is a locally owned, family business in Worthington.

But many customers don't just stop in for gas, they come to pick up a few things at the convenience store.

And since that new tax took effect in July, they say cigarette sales are not what they used to be.

The tax is changing the behavior of some smokers, but probably not in the way some lawmakers might have expected or wanted it.

Bob and Steve's Shell manager Jesse Raudenbush said "a typical carton customer is probably just going to get a pack or two.  With us being so close to two different borders, if they happen to be out of state, they're probably going to stock up while they're there."

Bob and Steve's Shell assistant manager Michelle Metz said "going across the border, to South Dakota, Iowa, and not only do they buy their cigarettes there, they're also probably fueling up, they're probably doing shopping, a little bit of dining, and that just, for us as a locally owned business, that hurts us, we like to keep our dollars in the community."

A carton cost about $18 dollars more with the new tax.

Jesse told us carton sales are about half of what they used to be.

And even though some smokers may switch to just buying packs, he says their packs sales are down twenty-five percent. Enditem