Utah’s oldest smoke shop will close due to tax

Increasing from 35 to 86 %, Utah’s cigar tax is becoming the highest in the United States. Existing cigar shops have to come up with considerable investments to cover the tax on their existing inventory – and some of them can’t afford it. According to The Salt Lake Tribune, Jeanie’s Smoke Shop, the oldest cigar shop in Salt Lake City, will not be able to stay in business.

Owner Gary Klc says he will have to close the business in June — just before a new tobacco tax takes effect July 1. That’s the date by which Klc must come up with $125,000 to cover the higher tax on his existing inventory. Klc says it’s too big an investment for products that will be taxed at some of the highest rates in the nation.

“When I think of my customers and suppliers, I feel like I’m losing my best friends. It’s like I’m going to a funeral,” said Klc, 50. “It’s been a hard decision. I grew up in this store so I get pretty emotional.”

Sen. Allen Christensen, R-North Ogden, who fought for years to raise Utah’s tobacco tax, said he understood that distributors would have to pay the bill, not retailers. But Charlie Roberts, Utah Tax Commission spokesman, said retailers indeed must pay the higher tax and yes, it will come due when the law takes effect this summer.

“If that’s the way it is, then so be it,” Christensen said. “I’m sorry for some of the businessmen the law will impact, but they’re selling a deadly product.”

I received an e-mail from John a few days ago regarding this; if you want to help Gary reduce his inventory you can give him a call at (801) 322-2817.