Florida Cigarette Sales Plunge Since Tax Hike

November 17, 2009

From the Treasure Coast Palm:

Cigarette sales have fallen sharply across Florida since a $1-a-pack tax increase took effect July 1, plunging nearly 50 percent in some counties.

Statewide, cigarette sales that regularly topped 100 million packs per month dropped to 73 million packs the month the tax became law. Since then, sales have inched back to around 78 million packs but remain well below prior levels.[…]

The most dramatic decline in cigarette sales was in Miami-Dade County. In June, the month before the higher tax took effect, retailers and convenience stores sold 8.9 million packs; a month later, 4.4 million. Sales since rose to 6 million packs in September, the latest month for which county-by-county information is available.

Cigarettes sales in Broward and Palm Beach counties both saw a similar initial decline – evidence of sticker shock among smokers – and then recovered a bit. Broward’s monthly clip of about 6.5 million packs now is below 6 million packs a month. Palm Beach County sales dropped from around 5.5 million packs to 4 million.

The article quotes Rep. Jim Waldman, D-Coconut Creek as celebrating the drop-off and urging another tax increase to coerce more smokers into quitting. Of course, if Rep. Waldman thinks cigarettes have no benefits or at least inflicts enormous costs on society, I’m not sure why he thinks a $1 or $2 tax is the appropriate government response. Just part of the craziness of using the tax code for shaping society in your own image, I suppose.

Some retailers think the drop-off isn’t due to people quitting:

At Mike’s Beer Barn in Tallahassee, whose owner lobbied for cigarette manufacturers, customers haven’t necessarily given up smoking, but they switched to cheaper brands, said general manager Dan Felger.

Instead of buying Marlboros – now $6.29 a pack – more are opting for little cigars that sell for $1.50 a pack or low-cost Dosal cigarettes, on special at two packs for $7.

Barney Bishop, president of the Associated Industries of Florida, which fought the cigarette tax increase, conceded the tax might persuade some smokers to quit, but he said many more will simply get creative. Smokers will stock up during trips to low-cost states, he said, or buy cigarettes tax-free over the Internet. Border counties have seen some of the sharpest declines in cigarette sales.

More on cigarette border shopping and smuggling, including Arkansas’s novel solution, here, here, and here.


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