Lawmakers and Retailers Voice Concerns Over Philly’s Tax Increase

Worry $2-per-pack raise could lead to black market problems

Melissa Vonder Haar, Freelance Writer

PHILADELPHIA -- Last week, Philadelphia became the latest city to propose drastically raising its cigarette tax with the City Council voting in favor of a $2-per-pack tax increase. The revenue would be used to help balance the $304 million budget deficit threatening Philadelphia public schools next year. With the proposed tax increase still requiring state legislation, many retailers and lawmakers have expressed concerns that the increase will lead to an amplified black market in Philadelphia, echoing warnings already voiced by the New York Association of Convenience Stores (NYACS) over smuggling issues currently plaguing the higher taxed New York City. (Click here to read more about the New York black market.)"

State Representative Michael O'Brien (D-Philadelphia) told NBC 10 Philadelphia that the legislation is "ill-advised at best," pointing out that Philadelphia residents could simply drive to another city or county to buy lesser-taxed cigarettes. He believes it's unlikely that the state legislature will pass the proposed tax increase.

"The atmosphere in Harrisburg is against any kind of tax increase," he said. "I don't know that you're going to be able to convince my Republican colleagues to vote for it."

Although Wawa Inc. told CSP Daily News that it does not and will not oppose this legislation, the Wawa, Pa.-based retailer does believe it’s important that lawmakers are well-educated about industry concerns about the potential effects of raising cigarette taxes, including the black market threat.

“While we have never taken an official position against this tax, we had reviewed and shared research and information on this topic in while Harrisburg,” said Wawa spokesperson Lori Bruce. “We believe the best decisions are fully informed ones, especially with complex issues such as this.”

Bruce noted that Wawa has not distributed such information in its stores or to its customers, nor does it plan to in the future.

“We truly want the best outcome for everyone involved,” she said. “We understand and wholeheartedly agree with the need to strengthen the schools and budget – even if it includes raising cigarette taxes.”