Published April 10, 2008 09:42 pm -
Area retailers still feeling pinch of higher cigarette tax
By SCOTT NILES Courier staff writer
BLOOOMFIELD — It’s been a year since the Iowa Legislature increased the state cigarette tax by $1 per pack and some area retailers are still feeling the impact to their wallets.
Bloomfield Gas-N-Mor Owner Jeff Owen said he has seen roughly a 40 percent loss in cigarette sales since last March when the increased tax went into effect.
Owen feels the impact more sharply considering Bloomfield is about 10 minutes driving time from the Missouri boarder.
“I’ve talked to the truck drivers who deliver to here and the Icehouse and they have told me they deliver about 2,200 cartons of cigarettes a week there,” Owen said. “I get around 60 cartons each week. That’s a big difference.”
The Icehouse convenience store/gas station is located on the south side of the Iowa-Missouri border along Highway 63. While the Icehouse owner declined to comment, a quick glance at the convenience store’s parking lot shows a number of vehicles with Iowa license plates.
Farther north, Mark Ebelsheiser, owner of the Quick Shop convenience store in Ottumwa, said cigarette sales did drop off after the increased state tax went into effect.
But now ...
“I’d say we are back around 95 if not 100 percent now, especially with cartons,” he added.
Ebelsheiser said the state makes roughly $16 off each carton of cigarettes he sells, where the retailer (selling at state minimum to be competitive) makes around $1.50 per carton profit.
Owen said it costs the retailer more to keep the cigarettes in stock.
“We have to pay the $1 tax increase, too, per pack and for the cartons,” he said. “It just gets passed down from us to the customers. I don’t blame them for wanting to get something cheaper.”
And Drakesville resident Toni Helm takes advantage of Missouri’s “cheap” cigarettes.
Helm’s brother-in-law “goes to Missouri once a week and I give him money to buy me cigarettes,” she said. “It saves me about $20 each week.”
She said a carton of the cigarettes she purchases costs roughly $33 a carton in Iowa (at the lower end); in Missouri, that same carton costs $20.
Why such a disparity in cost?