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."
Hey, I wear different colored frames in real life...:-)
How much of this money do you want to bet makes it to any hospital?! They are trying to make up for the ILLEGALS and deadbeats who don’t pay their hospital bills!
They're only exempt from state tax.
Translation: "We're gonna have a tough time shutting down the market."
I’m not a smoker, nor in that area so I don’t know the climate, however if good for it, I guess it’s time ya’ll start to learn to grow your own!
These people are Nazis.
Can't be posted too many times.
What state does Baraq get his cigs from?
Unless these politicians seek treatment for their addiction to tax revenue and population control, it will prove fatal.
I’m hoping it will eventually open someone’s eyes, however I am skeptical that it will work. Those of us that desire true freedom are in the minority, KYPD.
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