SALT LAKE CITY (ABC 4 News) - A tax increase now has a local business at risk. The legislature passed a 51 percent tobacco tax increase which has Utah’s oldest smoke shop ready to close their doors for good.
As the phone rings, Gary Klc answers, “Jeanie's Smoke Shop how can help you?” The tobacco shop is Utah’s oldest and largest serving loyal customers since the 1940's. Klc says, “Now they're taking it away from me.”
State legislators passed a tobacco tax increase. Klc says the tax is currently 35%. With a 51% hike he'll have to pay a total of 86% in taxes on his inventory by July 1st. Klc says, “I'd have to come up with about $120,000.”
Klc questions if his customers - even the loyal ones - will come in if he raises his prices. “Would they sell at 50 percent higher? That’s the big gamble.” As this shop faces a dark future, Senator Allen Christensen is thrilled with the tax hike. Christensen says, “They are pushing a deadly drug in the form of tobacco.”
Christensen explains that smokers make up about 10 percent of Utah’s population but they cause the most strain on the state's health care budget. “The tobacco users in this state are impacting our budget tremendously and they just needed to pay more of their fair share of the costs.”
Klc says the next three months at his shop will feel like a funeral. Doors will close for good June 30th.
This tobacco tax increase also means the cost of a pack of cigarettes jumps from 70 cents to a $1.70. This tobacco tax hike should bring in $44 million that will help balance the deficit in our state budget.
