By BROOKE SNAVELY
CENTRAL OREGON DAILY NEWS
State of Oregon taxes on tobacco products rose significantly in the New Year.
As of today, cigarettes now cost at least $2 more per pack. The taxes also affect cigars and vaping products.
Richard Johnson, owner of Midtown Direct Smoke Shop, intentionally sold his stock of tobacco and vaping products before the New Year to reduce his tax liability.
Instead, he focuses on selling hardware–pipes, bongs and hookahs–devices people use to smoke legal herbs, such as marijuana.
“My concern is people aren’t going to quit and that increase in money is going to be taken away from their family and the things that they need like shoes for the kids, school supplies, internet,” Johnson said. “I hope it’s a big enough increase that people do quit, my fear is that they won’t.”
Revenue produced by the tax changes will be used by the Oregon Health Authority to fund health care coverage for low-income families, including mental health services and public health programs such as those addressing tobacco and nicotine-related disease.
The new tobacco tax comes as a double whammy at High Mountain Mist Vape HQ.
Revenues were down 30% last year and this year for the first time, all vapor products are being taxed the same as tobacco because they contain nicotine.
“We are seeing an average of 30-40% price increases throughout the store due to the new tax. It’s a 65% tax,” Steve Johnson, High Mountain Mist business director, said. “We are trying to absorb as much of it as we can for our customers while still paying employees and keeping the doors open.”
All stores I spoke with reported a year end spike in demand for cigarettes, cigars and vaping products before the new tax took effect.
Most tobacco retailers are expecting a decrease in sales for a few months as smokers adjust to the new reality of $6 per pack of cigarettes and vaping products that cost much more than they did a few days ago.