Ohio: Cigarette, alcohol tax could affect Ohio businesses

Source: News & Sentinel

FEB 5, 2017

Taxes on cigarettes would go up 65 cents a pack and a penny tax would be added to every glass of wine and beer under a budget proposal by Ohio Gov. John Kasich.

Local business owners and employees said they’re concerned this may lead them to lose their customers to stores across the Ohio River.

“This will really hurt the stores close to the state border,” said Sue Benasutti, manager of the Marietta Smoker Friendly. “If West Virginia keeps their prices down, people will travel across the river to save some money.”

The state tax for cigarettes is $1.60 a pack. The proposal raises it to $2.25 a pack.

Taxes on other tobacco products also would be adjusted to keep them uniform with the cigarette tax.

“It will kill us because we have that competition with West Virginia already,” said Benasutti. “We make the majority of our sales on tobacco.”

Stores that specialize in alcohol aren’t as concerned with the tax increase.

“I already go across the river to buy alcohol and cigarettes,” said Stephanie Morris, manager at Weber’s Corner Store. “The increase on cigarettes will hurt stores like Smoker Friendly, but as far as alcohol goes, I think we will be OK.”

Morris said all the sales tax is already included in the sticker price on all liquor at Weber’s.

“We are the only liquor store in Washington County and cater to many restaurants, bars and hotels in the area,” she said. “They will continue to stay with us because really it’s the only option. I don’t know if that tax will hurt us but I don’t think it will.”

The increase is part of a group of revenue proposals from the governor that would allow the state to crunch income tax brackets and reduce rates. The changes to the income tax rates are expected to cost the state $3.127 billion over two years.

The increases in cigarette taxes are projected to raise $660 million.

According to a joint statement released by the American Cancer Society Cancer Action Network in reaction to Kasich’s budget, American Heart Association, American Lung Association, Campaign for Tobacco-Free Kids and the March of Dimes, the increase isn’t nearly large enough.

“We commend the governor for proposing an increase to the other tobacco products tax to achieve equality with the tax on cigarettes and for his continued investments in tobacco prevention and cessation programs,” said the statement. “These two proposals are proven ways of reducing tobacco use.  We strongly support funding these important programs. The governor’s proposed tobacco price increases are a step in the right direction, but Ohio can do better.”

Regardless of the increase, sales will continue, said some local residents.

“People are going to buy them no matter what,” said Larry Best, an employee at Byer’s Gas Station in Reno. “I don’t think increasing the taxes will make anyone stop buying them because as a smoker myself, I’m addicted. I’ll pay whatever.”

Although the idea of an increase in taxes leaves businesses in Ohio weary that consumers will make their way across the river, Gas N Goods in Williamstown doesn’t anticipate booming business if the proposal is approved.

“I don’t think it’ll change our business too much because people will pay more money just for the convenience,” said Gary Lauderman, employee at Gas N Goods. “Do I think we will get more business? Not at all. I think people will stay across the river and pay more because it’s easier.”