Syracuse, N.Y. (NCC News)- Smoke shops statewide are struggling with the new tax increase on cigars. Over the past year, New York State has raised the tax price on cigars nearly triple what is has been in recent years. The tax on the wholesale price of a cigar was 28%, but now it is 75%. This has been a part of the state’s initiative to aggressively crack down on tobacco users by creating laws that make it harder for consumers to purchase cigars.
But, there’s a problem with this idea. Consumers have adapted to purchasing cigars through online retailers which hurts local cigar shops. If cigar users purchase their cigars online, the state is losing revenue as well as it receives no money through taxes.
Cigar aficionado for over 25 years John Grandinetti is one customer who is not pleased with this tax hike. Grandinetti has been purchasing his cigars from a Syracuse cigar shop called Rocky’s News and Cigars for over two decades, but now it’s not in his budget to buy in person.
“Well, I, I find it’s more difficult to support my local retailer when I can go and buy on the internet, and there’s no tax,” Grandinetti said. “How many people aren’t buying local? So, the state gets nothing.”
Grandinetti saves hundred of dollars monthly by buying his cigars in bulk online. He isn’t alone as he knows some cigar users that drive to other states to purchase their cigars in stores in which the tax is lower than what it is in New York.
Rocky’s News and Cigars is a Syracuse owned cigar shop that has been in business for over four decades. The shop has a social aspect to it where customers can purchase cigars, and then sit down and smoke with their friends in the store’s cigar lounge. With this tax raise in place, the store has lost many customers to other ways of purchasing cigars for a cheaper price.
Owner of Rocky’s News and Cigars Mike Glynn has found out that he is losing on average 10 sales a day, 300 a month, and about $3,000 in revenue per month. For example, the store sells a cigar that is $100, but it’s $135 after tax. Customers have found that same cigar online for $110 after tax. Glynn believes that this situation has caused many cigar lovers to lose one of their favorite activities because it’s just too expensive to do anymore.
“Cigars are a hobby, and guys when their hobby gets too expensive, they move on to another hobby. When their hobby is uh outstrips their budget, they change what level they pursue the hobby,” Glynn said.
But the store is finding ways to adapt and fight this tax increase. One of the ways they are trying to bring back customers to in-store shopping is by purchasing a wider variety of “economic friendly” cigars. The store has also been planning and running various social events outside of the store to get their name out to cigar aficionados and show what their products have to offer.
Some of the events that the store has and will run are:
- golf leagues and tournaments
- charity events
- cigar smoker events at Syracuse Mets baseball games
- gun shooting range events
Glynn says these events are a way to branch out to a new area of clientele to show customers that their cigars are worth the extra money and to try to take the lifestyle of cigars and match that up with hobbies outside of the store. Cigars can be enjoyed while doing many activities, and those are ways that Rocky’s is trying to gain back revenue.
Their next event is a Christmas dinner in which you receive a meal and four cigars for $110. Tickets can be purchased at Rocky’s Cigars website.
Another way that Glynn is fighting this issue is by lobbying for a tax cap on all cigars. While Glynn is the owner of Rocky’s, he is also the president of The New York Tobacconist Organization.
The organization is attempting to put a tax cap of $0.50 on all cigars. This is a complicated formula, but the tax would be lowered drastically, and the thought is that this tax cap would bring back many customers to in-store shopping and supporting local cigar shops all around the state.