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Ohio Retailers Brace For Cigarette Tax Hike

Starting Friday, Ohio's cigarette tax jumps by 70 cents per pack to $1.25 and convenience store operators and other retailers are worried about its impact.

"People come in and they say, 'They're trying to get us to quit,'" Gene Watson, manager of Smokes for Less in Springfield, Ohio, told the Springfield News-Sun. "I said, 'No, they're trying to make more money off you.'"

Ohio raised $351 million in cigarette taxes in 2004, according to the Ohio Department of Taxation. The state expects the tax increase to add $15 million to that sum its first year, according to the newspaper. Approximately 20 percent of Ohioans smoke.

The state legislature last increased the tax in 2002, pushing it from 24 cents to 55 cents a pack.

Cigarette retailers told the newspaper that smokers are more likely to switch to cheaper brands or buy cigarettes in states with lower taxes than quit. Michigan taxes cigarettes at $2 a pack; Pennsylvania at $1.35; Indiana and West Virginia at 55 cents and Kentucky at 30 cents.

"Springfield is not far enough away from the border that people won't cross over into Indiana, "said Nate Willison, executive director of the Ohio Association of Convenience Stores.

When the state raised cigarettes taxes in 2002, sales decreased in Ohio and rose in Kentucky, he told the newspaper.

But Sue Ried, who manages Just Smokes, said diehard smokers won't quit and gas prices will discourage out-of-state shopping. "The way gas is now, you're not going to save much going to (Kentucky or Indiana)."

Other cigarette retailers worry the price increase will trigger theft. Nikhil Patel, owner of Cash & Carry Food Mart, has had three or four break-ins, when criminals stole cigarettes. The category makes up 30 percent of his sales. "They'll take the most expensive and easiest thing to grab," he told the newspaper.
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