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Cigarette tax revenue expected to drop

Thu, 12 Jul 2012 15:16:45 CDT
By: IPR


A state forecasting group expects cigarette sales to dramatically decrease in the coming months. It follows last month's increase in Illinois' cigarette tax, and could mean it'll be a while before state government sees the benefits from the tax hike. As of June 24th, cigarette packs cost an extra dollar. Lawmakers decided the money should be used to help fund Medicaid, the state's program of healthcare for the poor, disabled, and elderly. The Department of Revenue limited distributors from stocking up on cigarettes before the tax went into effect. A judge eventually told the state it couldn't do that, but one retailer says the damage was done.
Taffy Robbins is with Discount Tobacco, which has 19 stores across Illinois. She says the state's limit was bad for business and customers.

   

“You know because they wanted to stock up obviously, you know I understand that, it was hard for us to get them in our shelves to get them to our customers.”

A report by a state government forecasting group says because of the ruling, smokers stockpiled cigarettes, and it could be “several months” before extra revenue is collected as a result of the tax. The state had originally expected to collect $350 million extra dollars for the fiscal year, but the report says it could be difficult to reach that target.

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