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Cigarette Tax: Bad for Business?
Some people seem to think this tax won't generate the intended revenue because it could hurt business? Vinton has never had a cigarette tax, which has helped the town's businesses grow- retailers say 85-percent of their cigarette sales are to people from outside the town. And with this new tax looming, some are concerned it could spell big trouble.
Chris Redford buys his smokes by the carton. In just the past two months, government taxes have pushed his cost per carton up $7 and with a new local tax in the works, it has Redford wondering.
"Cigarette tax again? We've had plenty of 'em. They've already went up where it's ridiculous- a man can't smoke," Redford said.
Now the Town of Vinton is looking for revenue of its own through a tax. Tuesday night, town council will decide whether a recommended 20-cent per pack hike is too much or too little.
"It would be worth the money in savings to drive another mile," Redford said.
That's because just down the street, Roanoke County doesn't have a cigarette tax and can't impose one by state law. Retailers say a tax in Vinton will send the business there.
“The business is going to be down 50, 60 70 percent. They add three more dollars, it means almost 40% price hike over the past two months and it's really bad in this bad economy," Store Owner D.B. Patabiya said.
Patabiya is lucky. He owns a store in Vinton and Roanoke County. So while his Vinton store may suffer, his Roanoke County store should see a nice increase.
It's the other stores in town that Patabiya is worried about because many of them owned by his friends. "It's not going to hurt me, but the other 12 businesses in town, it will hurt them bad," Patabiya said.
The town manager's recommendation will be a $2 per carton tax. Based on research, that tax would net the town a half million dollars, $300,000 more than original projections.
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