Originally Posted by Crown Hookahs
Actually, it's pipe tobacco and cigars as well. I also manage a hookah shop here in Salt Lake, UT. currently our OTP tax is 35% (basically, the retailer has to pay an additional 35% of our wholesale cost to the State of Utah.) July 1st, it's going to 86%. Remember everyone complaining about the tobacco prices in Texas? That'll be Utah as well before long.
Also, not long ago Utah passed a law that prohibits the commercial sale of tobacco via state lines, joining the ranks of Montana and Washington.
As a consumer, and as a retailer, this pisses me off. We are closing our cigar humidor because of this. We have one of the most beautiful humidors in Utah, and all that work down the drain. It would actually cost us money just to keep the humidor going. Are you familiar with Jeanies? It's a really top end cigar store, that is closing at the end of June because of the tax. Either that, or have to pay a retroactive floor tax of about $125,000.00 upfront, no payment plans available. All the tobacco on our floor we have to pay the difference between 35% to 86% immediately.
This tax thing is catching on and looks like other states and perhaps the federal government are going that way soon. Here in Illinois they call "SinTax". Easy to raise taxes on tobacco, alcohol, gambling....since it will not be opposed by many people. The thing is it alwyas almost hit the lower in people who can afford it the leasr. Every state is running a huge defecit becuase they have costs that are spiraling out of control mainly due to public sector entitlements (i.e healthcare, pensions....) which they refuse to cut so huge tax increases are in our future. In the mean time, states like Illinois and recently Michigan passed laws that prohibit smoking and cigs and hookah in estabishments that also serve food and liquor, this includes bars and night clubs, which caused many places to shut down and go out of business at a time when the state is desperate for tax collection.