NYACS Gearing Up for Cigarette Tax Hike

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NYACS Gearing Up for Cigarette Tax Hike

ALBANY, N.Y. -- The state legislature here was preparing to pass a $1.25 per pack tax increase on cigarettes yesterday as part of its state budget, despite the effort of the New York Association of Convenience Stores (NYACS) and numerous retailers, distributors and manufacturers.

With the passage, NYACS predicted mom-and-pop convenience stores will be forced to close as price-sensitive cigarette customers travel to border states with lower taxes to purchase smokes, or go through "tax free" sources such as Native American reservations, the Internet or the black market.

"When these small businesses die of starvation, the coroner should rule it a homicide," NYACS President James Calvin said in a statement.

Once the budget is signed by Governor David Paterson, the tax hike will take effect June 3, 2008, raising the state excise tax from $1.50 per pack to $2.75, and in New York City, an additional $1.50 local tax is assessed, according to the association.

Further, a "floor tax" on existing cigarette inventory as of close of business on June 2, will be payable in two installments due August 20 and December 22, NYACS stated.

"By driving millions more New York smokers to the tax-free side of the street, this tax increase is a lose-lose-lose proposition for New York," said Calvin. "Tax-collecting stores lose core customers, the state and local governments lose much-needed revenue, and the anti-smoking movement loses ground."

As a result, NYACS will continue its fight for a level playing ground between Native American and non-Native American retailers with renewed urgency, Calvin stated.