Most customers cooling down after tax hike

Published 12:00 am Sunday, May 31, 2009

NATCHEZ — Two quarters, five dimes, 10 nickles or several combinations of those coins can all add up to 50 cents.

After the Mississippi legislature increased the cigarette tax by that amount, smokers across the state are digging for extra change. The per pack tax is now 68 cents in Mississippi.

The tax increase, which went in effect on May 15, wasn’t new news to most people, but local tobacco retailers said their customers were still upset about the price hike.

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But now, two weeks after the tax increase went in to effect, local retailers say their customers are getting used to handing over the extra coins.

“They are just frustrated about it now,” said Sarah Wells, clerk at Tobacco Mart in Natchez. “They are used to it by now. (The complaints) have really died down.”

Betty Smith, owner of Tobacco Station on John R. Junkin Drive in Natchez said much is the same at her store. She said most of her customers knew a tax increase was imminent, but they had little warning about when it would actually take effect.

“Several people would come in the days before and ask it if had taken effect yet,” Smith said. “I would say ‘no’ and they would say ‘good’ and get their cigarettes.”

But the Mississippi increase wasn’t the only tax increase smokers have seen recently. The federal tobacco tax increased to 62 cents a pack just eight weeks ago.

While the tax increase is having an effect on consumer’s wallets, Smith said the tax increase is hard on her too.

Smith received a letter from the State of Mississippi with instructions no how to levy the new tax. The letter stated that she had to count each pack and carton of cigarettes in her store and pay 50 cents per pack and $5 per carton, despite the fact that the cigarettes were in stock before the new tax was initiated.

“I have until June 15 to pay it, but it is going to make it hard,” she said.

But so far, neither store is seeing a large impact on business but both Wells and Smith say they have noticed small changes.

Wells, who has been working at Tobacco Mart since January, said business is still steady but not at hectic as it once was.

“I don’t know the exact numbers,” Wells said. “But the times of the day when we would normally be busy, we aren’t as busy now.”

Smith said she has noticed some customers aren’t making their daily or weekly stops at the store, but since her numbers are the same, it is hard to tell the impact on business just yet.

“My dollars are about the same,” she said. “But with the price increase, it would make sense that some people aren’t coming in.”

Smith has seen at least two of her former customers quit smoking since the tax increases.

She said the price increase was not the only factor, but it did make a difference.

“I saw one lady who used to come by here every day on the way to work,” Smith said. “She told me she hasn’t smoked a cigarette in five days. I told her ‘congratulations.’”

She said other customers are still coming in, but want to know where their extra money is going.

“One lady was really upset about the increase at first, but then after seeing a report on television on what the (federal) money is being used for, she was OK,” Smith said. “But now she wants to know what the Mississippi money is being used for.

“I hate it for my customers, but there isn’t anything I can do.”