Cigar Weekly

The owner of a downtown cigar store said business is sagging two weeks after a new tax on tobacco products went into effect.

“The primary function of my business is tobacco products, particularly premium cigars, so obviously I feel a direct impact,” said Steven McDowell, owner of Old Havana Cigar Co. on Broad Street. “Customers may still buy a product, but they’re budget conscious so they’re buying a less expensive product, which means my sales have gone down.”

The single largest federal tobacco tax increase ever went into effect April 1, with the per-pack tax on cigarettes climbing from 39 cents to $1.01.Though the rate varies by product, taxes have increased on all tobacco items.

Chewing, roll your own and pipe tobacco users have been hit especially hard, McDowell said. The price of a 2-ounce pouch of pipe tobacco at his store, for example, has increased about 30 percent, from $4 to $5.25.

“It’s made them an almost unaffordable luxury,” he said.

The tax increase, which is meant to finance a major expansion of health insurance for children, is expected to raise about $33 million during the 4½-year-long expansion.

Customers at the BP station at 4228 Martha Berry Highway are complaining about the increase in prices, but they’re still buying, said manager Melissa Carter.

“Most customers continue to buy their regular cigarettes, while other customers have switched to a cheaper brand,” she said.

Angie Piper, owner of Tobacco for Less on Martha Berry Highway, also has noticed customers buying less expensive products. She said her sales have taken a hit since the new tax rate went into effect.

“You can tell,” she said. “Business has dropped because people can’t afford it, and it’s understandable.”

Piper — who says she believes smokers have been unfairly targeted with the new tax — said some of her customers have even quit smoking because they can’t afford to pay for cigarettes.

McDowell and Piper both said they believe the tax is a hardship for small business owners.

“I understand there are programs that need to be paid for, but in the state of a recession you do not raise taxes on anything, especially when it comes to small business,” McDowell said.

The Associated Press contributed to this report.