Cigarette Sales in Minnesota Dropped Due to Tax Increase

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In Minnesota $1.60 per pack tax increase which came into action at July 1 resulted in cigarette sales drop. Minnesota Department of Revenue figures demonstrate that cigarette stamp sales dropped more than 35% this July in comparison with July 2012. Tobacco stamp sales for August dropped 12% in comparison with the same month in 2012.

According to the department, though sales are dropped due to the higher tax, the money Minnesota state gatherws from cigarette taxes has grown.  28-year-old Abdul Habit, who works at New Smokes in Maplewood criticizes the initiative and says that previously whose who used to buy carton of cigarettes do buy now only several packs. People who used to buy a pack, now they just ask for single cigarette.

Abdul  Habit said many his clints complain about the tobacco tax increase and they cry a lot, nobody is happy about it.  Before cigarettes can be legally sold at stores like New Smokes, wholesalers apply tobacco stamps they buy from the state to every cigarette pack.   The stamps show the state taxes have been paid.

The stamp machine at M. Amundson Cigar and Candy Co. in Minneapolis is very busy these days. The company still sells more than $1 million in cigarettes every month.  Company co-owner Ross Amundson said they have lost one-third of their sales.

Shops that they sold to in the Wisconsin state have lost most of their volume and the larger cigarette shops around the cities here that they sell to, their volume in cigarettes is probably in half. Amundson said while cigarette sales are dropped he is selling more roll-your-own tobacco and more e-cigarettes.  He says that people choose alternatives such as cheap cigarettes.

At the same time, cigarette sales are up dramatically in North Dakota where the state tax on a pack is just 44 cents compared to Minnesota’s $2.83.  North Dakota Department of Revenue statistics show cigarette sales there were up 9% in August over the same month in 2012.   Minnesota officials believe that increasing the cigarette tax by roughly 30% would lead to 30% reduction in cigarette use.

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