IL Smokers stock up on cigs ahead of tax hike kick-in

Illinois smokers are stocking up on cigarettes ahead of a $1 per pack tax hike kicking in later this month, reports Illinois' State Journal-Register:

Some convenience stores are running low on cigarettes because people are stocking up ahead of Illinois’ upcoming cigarette tax increase...

[...]

The Illinois General Assembly this spring raised the state cigarette tax by $1, to $1.98 per pack. The hike goes into effect June 24.

William Fleischli, executive vice-president of the Illinois Association of Convenience Stores, said, people are buying in advance of the increase.

“It’s not Warren Buffett buying 10 million cigarettes,” Fleischli. “It’s a guy that usually buys one carton. Now he wants to buy two or three, trying to save $18 or $20..."

Illinois legislators voted earlier this year to raise the tax in order to help fill a $2.7 billion hole in the state's Medicaid budget.

But the tax increase could end up padding the coffers of states like Indiana and Missouri, instead-- or so retailers who sell tobacco in those states appear to be hoping.

As NBC Chicago reports, a Cook County, Illinois, cigarette tax hike earlier this year is to blame for an alleged 15 to 20 percent drop in business at one Illinois tobacco retailer, adding that Indiana sellers could substantially gain from the latest increase:

"After March 1 when Cook County raised their taxes, I lost about--between 15 to 20 percent of my business," Illinois tobacco shop owner Jawad Muqeet said. "The prices are so high nobody wants to buy cigarettes in downtown"

Indiana tobacco sellers could gain from the this increase. Hammond smoke shop owner Roni Patel says a carton of Marlboro cigarettes costs $56 on average in Indiana, compared to $50 in Will County, Illinois. He says the average price per carton in Will County will raise to $61 following the tax increase, expected to go into effect June 24.

Patel is hopeful about his prospects under the new law.

"Hopefully, yeah. We will make a fortune, you know," he said.

But for downstate smokers, crossing the border to stock up could prove even more appealing.

At 17 cents per pack, neighboring Missouri's cigarette tax stands as the lowest in the country. According to Tammy Whaley, who works at Route 3 Fuel and Liquor in Sauget, Missouri, when Illinois has increased cigarette taxes before, smokers have flocked to the Show Me State to stock up.

"We still have people buying single packs, but the price difference on a carton is a lot higher," she told the St. Louis Post-Dispatch.

On June 24, the price difference on a carton will be even bigger.


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