Moorhead convenience store owner says cigarette tax hike crushing business

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MOORHEAD, MN (Valley News Live) - Bad news for smokers, and for some local businesses. The price of cigarettes in Minnesota is about to go up, again.

Starting on January 1st every pack sold in Minnesota will include about $3.50 in taxes, about 12 cents more per pack than smokers pay right now.

One Moorhead store owner says it's impacting the whole community.

Owner at Brady's Service Center on 8th Street says they are deeply invested in their specific corner. Owner, Brady Olson says it hasn't been easy making money on the border of Minnesota and North Dakota with so much competition.

"In the last 10 years we have lost almost 20 family owned c stores in the Fargo-Moorhead area." He says they don't make much at all on gas, they make the most profit off smokers.

It's a problem because back in 2013 taxes on one pack went up $1.60.

Olson says he lost 80% of his smoking customers. "Those 80 percent of people went away and they may still at times get gas, but if they are going to get cigarettes else where they are going to get gas there. So we have lost a lot of those sales with it," he says.

Olson says they have been forced to raise prices, lay off employees, and compensate in other areas to keep up.

"I don't doubt that there is an impact, but I think it's all going in the business model you use, and for those that say this is just killing businesses in Moorhead, I don't see that,” says Representative Paul Marquart admits the hike is hard on border cities. Like Moorhead, but says to look at the overall picture. "We have actually seen the statistics that less youth are smoking, that's good."

"The other second affect is to the cigarette smoking smoker themselves, they are paying a ton more taxes, not that it's the best thing in the world, but it's their choice,” says Olson.

While the goal of the tax hike is to prevent people from smoking, Olson says it's also affecting people who choose not to smoke.

Minnesota's tax on cigarettes will increase to $3.54 per pack. North Dakota's rate is 44 cents per pack. While Wisconsin smokers pay $2.52 in tax per pack.