The Division of Alcoholic Beverages and Tobacco's 160 agents will coordinate efforts with counterparts in Georgia and Alabama and with Florida agricultural inspectors [image-nocss] as they brace for a potential new wave of smuggling, said the report. "Any time there is a lower tax in one state than another, this will be a problem," Marie Carpenter, a bureau chief for the state Department of Business & Professional Regulation, told the newspaper. "Auditors and agents will be working together to do investigative audits at the retail level."
Agents will be checking to make sure that the approximately 1.2 billion packs of cigarettes sold every year in Florida have the new tax stamp affixed by the wholesalers, one that will change from yellow to tan and include new security features to prevent counterfeiting, Carpenter said.
State regulators also will be busy ramping up a way to tax Internet tobacco sales, a completely new duty for them, Carpenter said.
"What we have seen is that when a tax increase of this magnitude is implemented, many people will turn to other alternatives, and one of them is the Internet," Bill Phelps, a spokesperson for Richmond, Va.-based Phillip Morris USA told the paper.
At the Hess station in Fort Myers, cigarette sales went up dramatically in the days leading up to the new tax. Mariella Magol, a Hess clerk, told the paper that she saw a "big rush" to buy cigarettes Monday.
At Hood's Mini Mart in Georgia, just two miles north of the Florida line and a 15-minute drive from Tallahassee, manager Roy Simmons said he will be fully stocked for what he expects to be a flood of Florida smokers and snuff dippers, said the report. Some cartons of cigarettes will be $8 to $10 cheaper, and some 10-can rolls of smokeless tobacco could be as much as $20 cheaper at his store, Simmons told the News-Press.
"We're preparing for it," Simmons said. "We've picked up our inventory. Hopefully, it will pay off for us."
The consumer limit for bringing in cigarettes from another state is two cartons, Carpenter said.
On the other end of the economic equation, Aaron DeSai, co-owner of a Quick-N-Save in Tallahassee, is expecting sales to plummet. The tiny store has four employees and DeSai is worried about what will happen to the bottom line of a business where as much as 34% of sales are tobacco-related. "It's going to be tough," he told the paper. "We'll have to cut somewhere. Obviously, we have to start with payroll and then inventory."
Jim Smith, president of the Florida Petroleum Marketers & Convenience Store Association, agreed. "We're going to lose jobs because these revenues produce income that pays salaries," he told the paper.
Legislative forecasters predict a $981 million windfall for state health programs the first year.
Meanwhile, Mississippi lawmakers late Monday approved the state's second cigarette excise tax increase of the year, and Governor Haley Barbour said he will sign it into law, reported the Associated Press.
The plan adds 25 cents a pack on less-expensive cigarettes made by companies that did not participate in the state's 1997 settlement of a lawsuit against big tobacco firms. Barbour had asked legislators to approve the tax, which is set to take effect today.
The large companies have lobbied for the new fee on their competitors, saying the makers of less-expensive cigarettes have a financial advantage by not paying millions of dollars a year for the settlement.
On May 15, Mississippi enacted its first cigarette excise tax increase since 1985, adding 50 cents a pack on all types of smokes. The rate went from 18 cents to 68 cents a pack. Top lawmakers said the tax of 25 cents on discount cigarettes will generate about $8.8 million a year.
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