Published: Wednesday, Apr. 01, 2009

Updated: Wednesday, Apr. 01, 2009

Smokers brace for higher prices

By BRIAN NEILL

bneill@bradenton.com

BRADENTON — Judy Hoffman was in the Tobacco Depot on Cortez Road on Tuesday stocking up on cartons of Liggett Select cigarettes before today’s federal tax went into effect.

“It’s terrible,” the Bradenton resident said. “People think it’s (smoking) sinful. Where can you smoke anymore?”

Beginning today, smokers will pay an extra 62 cents per pack for cigarettes as part of a new federal tax.

And Florida lawmakers are considering adding another $1 per pack in taxes on top of that to help offset an estimated $1.25 billion a year in health care costs for tobacco-related illnesses in the state.

The average cost for a package of cigarettes if the tax is approved: more than $5.

The federal tax increase will go to help fund the State Children’s Health Insurance Fund, which provides funds on a matching basis to states for low-cost health care.

Senate Finance and Tax Committee Chairman Thad Altman, R-Melbourne, and Sen. Ted Deutch, a D-Boca Raton, lent their bi-partisan support to a measure that adds a $1 per pack surcharge to all cigarettes and $1 per ounce for cigars and smokeless tobacco products.

That committee Tuesday voted unanimously to raise the cigarette tax $1 per pack and increase the tax on cigars and smokeless tobacco $1 per ounce.

While Florida collects about $430 million in cigarette taxes, $30 million in smokeless tobacco taxes and nothing from cigars, it spends three times that on treating sick smokers, said Deutch at a news conference.

“This is a staggering gap that is being subsidized by all of Florida’s taxpayers,” he said.

Some proponents of the tax also feel that paying more for tobacco products may discourage tobacco use, particularly among young people.

Fred Hoyland doesn’t buy it.

“If you look at TV, we have smoke-free ads that are all paid for by tobacco,” said Hoyland, owner of the Tobacco Depot on Cortez and 15 others throughout the West Coast of Florida. “If they truly want to stop it, then put a penalty on smoking for minors. We’d be all for that. That would hit home because the parent would have to go to court with the kid.”

Hoyland said the new taxes will hurt his business.

However, some of the prices on cigarettes made by the largest tobacco companies — like Philip Morris, J.R. Reynolds and Lorillard — have already been increased to offset the new federal tax, Hoyland said.

“They will not go up again (for the federal tax),” Hoyland said. Lower-cost brands, however, will increase, he said.

And cigars, which are Hoyland’s primary line of business, will be taxed an additional 40 cents each under the new federal tax, he said.

“It obviously makes a lot more cost to run your business,” Hoyland said. “You’re carrying the same product, but the carrying costs and the cost of the tax are enormous.”

And that doesn’t even take into account the proposed state tax.