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My Turn: Cigarette tax increase will ruin my business

New Hampshire Gov. Maggie Hassan has proposed a 30-cent cigarette tax increase to help offset our state budget expenses. As a small business owner, I urge our elected officials to think through the potential consequences of this legislation on tobacco retailers and small-business owners. A cigarette tax increase will not only negatively affect the tobacco consumer but will also be detrimental to the smaller tobacco retailers.

I own a small convenience store in Concord, Rose Belle Mobil Mart. Even with a convenient location, I, like many other small-business owners, find it difficult to compete with larger, corporate stores.

My cigarettes are not as inexpensively priced as competing corporations; however, a good location and varied tobacco selection has kept me in business – for now.

Tobacco sales are crucial to keeping my store afloat, especially in a down economy. In 2012, tobacco products accounted for 22 percent of my sales volume. Since I was forced, by previous tobacco taxes, to try to keep my prices low, tobacco only accounted for 10 percent of my gross revenue. These tight margins make it difficult to keep my store in business to begin with, and a tobacco tax increase would be detrimental to my store.

The governor, like many politicians, believes the logic is simple: If the cigarette tax is raised, the consumer will absorb the additional cost. This does not take into account the resources of larger corporations and is therefore significantly flawed.

There is a distinction between the way smaller stores, like mine, and larger stores buy tobacco products. Both stores have contracts – based on shelf space and tobacco sales – with the tobacco companies. Yet, the contracts are created to favor the larger corporations by allowing them to buy a larger amount of cigarettes at a decreased rate. The basic premise is the more you buy, the more money you receive back from the tobacco companies. So the larger corporations will be able to absorb the tax increase without passing the additional costs to the consumer, whereas, a smaller business, like mine, will need to pass along about 25 cents of the 30-cent tax to the consumer.

Since larger corporations will be able to sell tobacco at an unaltered price and consumers will ultimately purchase their cigarettes at the cheapest rate possible, this will force the consumer to stop buying products from my store and will ultimately put me out of business.

I strongly urge our elected officials to take the time to understand the intricacies of the tobacco market before passing along this cigarette excise tax increase, which would bankrupt my small business.

(Peter Potenza owns the Rose Belle Mobil Mart and Nadeau’s Subs on Main Street in Concord.)

Legacy Comments8

If the elected officials put a small tax on their BS, they would have enough money to do almost anything they want.

The left does not care about business Peter, large business or small business. They see any business as a means to get a revenue source for their social programs. It has not dawned on them, that when you make business the enemy based on what they deem your profit should be, that eventually business will either go elsewhere, or become too expensive to exist because of mandates and taxes. They never connect why we make nothing anymore, or why our economic climate is the way it is now. There focus is on revenue stream to support those who do not create anything. Never forget, if you are successful, they deem you got that way by being lucky, and it is your duty to share your wealth They are the ones in their eyes that shoud deem how much wealth you should attain and how much of that wealth they are entitled to take..

"The left does not care about business......They never connect why we make nothing anymore". Either you have not read my posts, or you now agree with me and think I'm a right winger.

Obviously you thought I was talking about you Earthling? Is it required that every time I make a statement on this forum I list the names of folks who I am referring to? I know your posts and I usually respond to them. I was responding to Peter.

To RabbitNH below (no reply button to click on): Sorry - I didn't realize your comment about "The left" was supposed to be a secret, just for Peter.

Your the one that does not get it. Your point was that you do not always agree with the left by your posts. You took my statement and instead said I was referring to you and did not read your posts The fact I mention the left does not necessary mean I was including you. So now it is a secret for Peter. Are you kidding me or playing the Dem game of twisting what folks say and putting them on the defensive?

Why is the tax on liquor not being raised by the same percentage, how about a tax on buying lottery tickets. How about a tax on people that buy "a certain brand" car. If the state wants to raise revenue then present a plan to the citizens and do it across the board, stop with the nickel and dime stuff. They can free up a lot wasted time in Concord talking about every little item they can get a few cents off of. I'm not promoting more taxes just saying stop with the nickel and dime crap.

democrats never ever care about the unintended consequences of their legislation

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