Massachusetts Tobacco Tax Hike Upsets Shop Owners

New excise taxes on cigarettes, cigars, smoking tobacco and smokeless tobacco take effect today, along with an increase in the gasoline tax to 24-cents-per-gallon.

July 31, 2013

HYANNIS, Mass. – At Puff the Magic store, the owner is not looking forward to changing the tax scale today with the new tobacco taxes, the Cape Cod Times reports. Owner David Wood has to change the pricing on thousands of different cigars. “I can't go in and change all the pricing overnight,” he said. “It'll take me days.”

The Massachusetts cigarette tax bumps up a buck to $3.51 on 20 packs and $1.25 to $4.3875 on 25 packs. Cigar and smoking tobacco will pay 40% in taxes, while smokeless tobacco products will be taxed at 210% rate.

The state’s gasoline tax rises 3 cents to reach 24 cents per gallon. The increases in both tobacco and gasoline taxes are earmarked to fund improvements to Massachusetts’s transportation infrastructure.

When Wood started his business in 1998, the state tax on cigars stood at 15%. Since then, it has doubled to 30% and today stands at 40%. The state rakes in $561 million in tobacco taxes last year.

Wood is bracing for an onslaught of customers who flock to his store to try roll-your-own tobacco each time the state hikes cigarette taxes. “Some stick to it, some go back, some quit,” he said with a shrug.

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