Posted on 02/25/2009 7:06:42 AM PST by ozark hilljilly
CAVERNA, Mo. - Terry Potter lives in Rogers but he won't buy cigarettes in Arkansas.
Potter plays golf in Bella Vista, and it's just a short drive to the Missouri state line, where a carton of cigarettes is considerably cheaper.
"I wouldn't buy cigarettes in Arkansas," he said, while shopping Friday at Don's Stateline Store in Caverna, Mo. "It's an $8 or $10 difference right now."
On March 1, Arkansas' new 56-cents-per-pack cigarette tax will go into effect, raising the price by $5.60 for a wholesale carton that likely will be passed on to retail customers. The tax will increase other tobacco products by 36 percent on the selling price, up from the current 32 percent, for a total rate of 68 percent. The money is supposed to help pay for a trauma system in Arkansas hospitals.
The price for a carton of cigarettes currently ranges from about $25 in Missouri to about $42 for a premium brand in Arkansas. A carton generally has 10 packs, each with 20 cigarettes.
"That's just more incentive to drive to Missouri," Potter said. "I think sometimes state governments lose sight of population concentrations on state lines."
Missouri has the second lowest state cigarette tax in the country - 17 cents per pack. Arkansas' current tax is 59 cents per pack, but that amount will increase to $1.15 per pack on March 1, which is still 4 cents below the national average. Nationally, the state tax rates on cigarettes range from 7 cents per pack in South Carolina to $2.58 in New Jersey, according to the Federation of Tax Administrators.
Just across the state line from Bella Vista, retailers in Missouri are anxious for Arkansas to start collecting the higher tobacco tax.
"Next month, it's going to get real busy," said Pam Cowger, manager of The Jug Store in Caverna.
The increases will continue.
On April Fools Day, the federal government will raise its cigarette tax by 62 cents per pack across the country, which means the price of a pack of cigarettes in Arkansas will increase by $1.18 between now and then. Add sales taxes to the state and federal excise taxes, and the total taxes on a carton of cigarettes in Benton County will be at least $18.76 in April, compared to $7.90 in Missouri, said Cowger.
"On April 1, people will stop buying cigarettes in Arkansas," she predicted. "That's a lot of difference. That's going to help our business."
"Between the lottery, the booze and the cigarettes, it's all cheaper in Missouri," said Angela Holland, another manager at The Jug Store. "I guess we don't have all the outrageous taxes. I hope they don't get any ideas."
*snip*
BOOTLEGGING?
Holland said it's not unusual to have Arkansas residents buy $400 to $600 worth of cigarettes at a time.
Arkansans may legally possess one carton plus one pack of cigarettes that don't have an Arkansas cigarette tax, said Gabe Holmstrom, a spokesman for the state attorney general's office. Arkansans can have 50 cigars or three pounds of loose smoking tobacco without the state tax stamp. If they possess more than that, or sell cigarettes in Arkansas that don't have the state stamp, "it's a criminal offense," Holmstrom wrote in an e-mail.
If the value exceeds $100, it's a Class C felony, punishable by three to 10 years in prison. If the value is less than $100, it's a Class A misdemeanor, punishable by up to one year in jail.
"The Missouri border is going to be a problem when the new tax kicks in," said Greg Sled, enforcement supervisor for the Arkansas Tobacco Control Board. "With the increased Arkansas excise taxes, we anticipate a significant increase in tobacco smuggling. So far, most of our enforcement has been targeted at the retail level, but in light of the new tax increases, additional enforcement needs will be evaluated and enforcement efforts may include both retailers and consumers. This will take additional man-power to keep tobacco smuggling in check."
"If cigarette smuggling becomes a problem, then we would step up, at the direction of our director," said Capt. Lance King, with Troop L of the Arkansas State Police in Springdale. "But we haven't yet."
"Along the Oklahoma border, the Cherokee Nation was known for smoke shops and cheap cigarettes. But that changed on Nov. 21, when a new agreement between the Cherokees and the state of Oklahoma blew the cigarette tax from 11 cents per pack to 66.5 cents in the border tribal land along the Arkansas state line.
That means, since Nov. 21, the cigarette tax was higher in the Cherokee Nation than in Arkansas. But that will change on March 1. And the Arkansas tax will be higher by 12 cents over Oklahoma's $1.03 per pack in non-Indian shops."
They got us coming and going, folks. Wow, a carton and a pack from out of state will now make you a criminal. Let's hear it for Change!
The last pack of Winstons I bought cost $.50.
LOL ... time to buy an old clunker car, load it with cigarettes and head south toward Fayetteville.
A paper with "Democrat" in the title actually tells people that taxes on producers are passed on to consumers? I'm confused.
OMG. Illegals and DRUGS are being smuggled into Arkansas daily. I don't see the additional man-power to keep THEM in check.
What are they going to do? Set up road blockades between State Lines to check for contraband cigarettes?
Massachusetts residents have been going up to New Hampshire for years.
Now, we’re going for candy (new candy tax coming) and sugary drinks (new sugary drinks tax coming) and gasoline (new gas tax coming)......and fireworks.
MA actually has State troopers that sit in parking lots in NH and they follow MA residents back to MA and THEN bust ‘em with their fireworks.
Gotta love it. Just wait until, in the scramble to prop up their bloated, wasteful budget, Localities start imposing their own taxes. Guess they'll set up roadblocks to frisk people going from one city to another. LOL
People cross the bridges from NJ to PA to buy cigarettes and fireworks. There are smoke shops and firework shops within a stone's throw of nearly every bridge.
People cross the bridge from PA to NJ to buy beer and alcohol. PA still has prohibition laws on the books (only PA state shops can sell alcohol and you can only buy beer by the case in these stores). NJ has no silly rules has much greater selection, better hours and lower costs in their stores (again, many a stone's throw from any bridge).
And yes, both states have silly laws about "smuggling" or "bootlegging" across state lines...
And that’s also what’s heading our way, too! It’s insane.
Guess I picked a bad time to get into the retail grocery trade. : (
This is sort of off topic, but when I worked at a local liquor store chain in Springfield, MO, I would see people from Oklahoma buying anywhere from 4 to 10 cases of beer to take back home with them. They hated the 3.2% beer that they got in OK. They wanted the 5% beer that Missouri has. I wondered if they could get busted for bootlegging the booze over the border like was mentioned in this article.
Don’t let Huckabee know. He’ll run for Ark gov again to stamp out such evil. LOL
Obummer just raised the tax on loose tobacco from $1.10 a pound to $25 a pound! Starts April 1st.
how can that felony be constitutional?
it is a commerce clause violation (mudflap line of cases and all that)
What might come from tobacco bootlegging?
Last time I was in Ukraine a couple of years ago Marlboros sold for $0.60/pack. In Dubai, Marlboros are $10/carton. It's only a matter of time before people in the smuggling business start filling up boats with foreign-purchased smokes.
Lawmakers are killing the golden goose with a combination of higher tobacco taxes and further smoking restrictions. The need 21 million new smokers and every existing smoker just to pay for SCHIP and in me they just lost a 23 year smoker when I finally threw in the towel last year and quit.
Go to AZ or NM and go to the indian reservations and get smokes tax free.
Government makes 10 times more profit on smokes then the people that make them and gov does nothing for it.
Is this right?
Yeah, and just wait until all the states start requiring you to have GPS to tax your miles driven. They can then probably go get a court order to see that you’ve been driving to the next state’s convenience store an awful lot. People, learn to grow your own.
“Obummer just raised the tax on loose tobacco from $1.10 a pound to $25 a pound! Starts April 1st.”
Yes. The tax increase in Apr. applies to all tobacco products-cigars, cigs, loose, snuff, chew. I still don’t know all the variations- .62 cents a pack on cigs, but I honestly don’t know what the increases will be on the other stuff. I sell a lot of chew, have no idea what the tax will be on that.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.