Tobacco Sales Down in Minnesota, up in North Dakota


Since in Minnesota there were increased taxes on tobacco products, North Dakota reported cigarettes sales increase.  Therefore, it is too early to say if the tax increase has reduced the number of smokers.  North Dakota Tax Commissioner’s Office says that the number of cigarettes sold by distributors to retailers in August and September 2013 were up 12% and 5.5% respectively, than those sold in the same months in 2012. Those are the only two months of the current year in which sales were higher than at the same period in 2012.

John Quinlan, who is the compliance officer in the North Dakota Tax Commissioner’s Office, said that probably this phenomemon is connected to tax increase in state of Minnesota. According to newly adopted law in Minnesota, tax on a pack of cigarettes was increased by $1.60. The law came into action in July 2013. Today the state’s tax is $2.83, in comparison to North Dakota’s 44 cents per pack. State of North Dakota hasn’t increased tobacco tax since 1993.

However, the number of stamps that were sold in Minnesota to distributors to put on cigarette packs in July and August were much lower than in 2012. Collection of taxes increased by $12 million and $24 million, respectively, in comparison to the same period in 2012.

Several gas stations and stores in northwest Minnesota said there was reduced number of people buying cigarettes. They suspect many are going to North Dakota for cheaper cigarettes. John Yuric, manager of the Valley Oil gas station in Warren, Minnesota, said some people still come into his store to buy a pack of cigarettes to hold them over until they can make another trip to North Dakota.

He said also that fewer people buying cigarettes means fewer people are entering the store and buying other items.  Tracy Gonzalez, who works as a cashier at the River’s Edge Bait and Convenience store in Greenbush, Minnesota, said customers may be going to North Dakota to buy cheap cigarettes, but they haven’t seen a big drop in sales. The tobacco tax increase was promoted as a way to reduce smoking in Minnesota, and to prevent youth from starting smoking. While more people show interest in quitting smoking, it is unclear whether they are following through.

Senior communications manager for ClearWay Minnesota  Mike Sheldon said that  since the tobacco tax raise, the number of phone calls and online inquiries about its QuitPlan services have increased by 200%, but it is too early to say if more people are actually quitting.

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