Cigarette Tax Hike Proposal Frustrates Retailers

Honey Farms exec explains in a Boston Herald op-ed why Governor Patrick’s proposal to increase the state cigarette tax in Massachusetts would hurt retailers.

April 02, 2013

BOSTON, MA – Convenience store owner David Murdock, executive vice president of Worcester, Massachusetts-based Honey Farms, Inc., wrote an op-ed earlier this week for the Boston Herald, calling out Governor Deval Patrick’s proposal to raise the state’s cigarette tax.

“Companies like ours provide tens of thousands of jobs, and convenience stores are one of the few sectors of the economy that is actually growing,” he began, citing NACS data.

The Massachusetts governor seeks to add $1 to the current $2.51 per-pack tax, which already is one of the country’s 10 highest. “It’s a big problem for businesses like mine, because cigarette sales are responsible for more than one-third of our store sales and the ancillary sales for groceries, gasoline and other products are crucial to our well-being,” Murdock wrote.

While acknowledging the state’s economic ills, Murdock said the cigarette tax has become an easy political target — though “other states are now realizing what we have recognized for some time — there is a point at which smokers will go elsewhere to purchase cigarettes, and when they do they take jobs and Massachusetts revenue with them.”

According to Murdock, 18% of cigarettes consumed in Massachusetts are already purchased from other states. “The higher prices will increase the likelihood of further increases in our underground economy and bootlegged products,” he said.

Citing neighboring New Hampshire’s tax of $1.68, Murdock said, “a Massachusetts increase would put Massachusetts retailers like me at a distinct disadvantage of around $1.83 per pack — $18.30 per carton.

“For the sake of my business and my employees, I hope the Massachusetts Legislature understands it, too,” he concluded.

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