Minnesota cigarette sales fall, but tax collection is up
- September 27, 2013 - 12:07 AM
Minnesota’s tax increase on cigarettes has dampened sales since taking effect on July 1, just as tobacco sellers and anti-smoking groups predicted would happen.
Early Department of Revenue figures show a sharp drop in demand for the stamps affixed to each pack of cigarettes, Minnesota Public Radio reported Thursday. The stamps are proof that state taxes have been paid. Wholesalers and retailers pin the dip on the extra $1.60 per pack tax, especially in border towns. For July, stamp sales fell more than 35 percent over the same month a year ago. For August, the drop was 12 percent.
Despite fewer sales, the department reports that tax collections are up by more than 56 percent. But that figure is slightly less than projections used when lawmakers built the tax increase into their newly enacted state budget.
Abdul Habit, who works at New Smokes in Maplewood, said customers complain regularly about the tax increase. “It’s very bad,” Habit said. “People who used to buy a carton, now they buy five packs. People who used to buy a pack, now they just ask for single cigarette.”
Anti-smoking groups say the higher cigarette tax is having its intended effect: Getting people to consider quitting. “It’s pretty striking in terms of the number of web visits of people who are checking out Quitplan.com,” ClearWay Minnesota spokesman Mike Sheldon said. “We’re talking about a 240 percent increase year-over-year. That’s a huge increase and certainly the tax is a big effect of that in making people think about quitting.”
© 2013 Star Tribune