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Business owners worry over cigarette tax hike

Increased cigarette and other tobacco product tax information has been posted at The Briar and Burley on Kirkwood.
tanka dhakal
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WFIU/WTIU News
Increased cigarette and other tobacco product tax information has been posted at The Briar & The Burley on Kirkwood.

Business owners in Bloomington are worried about the potential impact of increased state tax on cigarettes and other tobacco products.

Indiana lawmakers increased state cigarette tax by $2 per packet. The new cigarette tax goes into effect July 1, jumping from around $1 to $3 per packet.

Matt Borders, manager of The Briar & The Burley on Kirkwood, is worried about the increase.

“They keep forgetting about this thing called the internet, where you can get whatever you want from wherever it is, no matter how much it costs, and they really can't do anything about it,” he said.

“So, people will mail order their products from out of state, where other states that have lower taxes and so that will have an impact on our business.”

Read more: Cigarette, gas tax hikes coming to Indiana July 1

In Kentucky, the cigarette tax is $1.10 per pack. Each cigarette pack also carries an additional $1 federal tax.

Borders is concerned about increased tax on other tobacco products, including cigars, pipe tobacco, and chewing tobacco.

“Cigarette tax is bad enough, but they had just lowered the tax on cigars. Back in January, they capped it at $1 per cigar,” he said.

“Now they've raised it to 30% on everything whose wholesale cost is less than $10 and capped it at $3 for everything whose wholesale cost is $10 or higher. So, for most cigars, the tax is going to triple.”

He said many customers have been stocking up on cigars and cigarettes to avoid the coming price hike.

Correction: This story has been updated to correct the name of the store to "The Briar and Burley."

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