With the Vermont Houseís recent attempt to raise the cigarette tax by at least 50 cents and the Vermont Senateís proposal to raise it by $1.50, our local elected officials have yet again left retailers anxious about the potential consequences of tax increases and loss of revenue.
In this already sluggish economy, I hope our leaders will continue to find ways to help retailers grow and expand, instead of undermining retailers with tax increases.
Cigarettes are consistently the top revenue generator for our stores. This observation is not just particular to our stores, but an industry standard, according to the National Association of Convenience Stores. Raising taxes on tobacco will negatively affect Vermontís stores in several ways: by lost sales of tobacco products, which causes loss of revenue and as a result eliminating additional revenue possibilities in the diminished sales of other merchandise.
Tobacco products are typically bought in conjunction with other commodities, like milk or eggs. A tobacco consumer will, typically, buy all these products in the one place where he or she will get the best tobacco price. If Vermont increases the tobacco tax, consumers will have less incentive to visit our stores.
Therefore, any tobacco tax increase, coupled with a reduction in the sales of other commodities, will impact our bottom line. It will have a negative impact on jobs and working families throughout Vermont.
An increase of tobacco taxes is a quick fix for our state officials; however, the same tax leaves our stores at an economic disadvantage. Itís time our elected officials realize that with every tobacco tax increase in Vermont, we send more and more business out of state.
(Midway Oil Corp.)
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