To close a growing budget hole, Governor Lynch wants to add 25 cents a pack to the tobacco tax, and cut in half the discount retailers get when they by wine from the state.
Lawmakers debate the tobacco tax nearly every year, and nearly every year, much of that debate hinges on how change might harm NH’s prized cross-border sales.
"At minimum 40 percent of those products are sold out of state."
John Dumais is president of the NH Grocer’s association…He and other retailers have stressed this logic with varying degrees of success for decades.….An added wrinkle this year though, is that Massachussetts may soon raise its tobacco tax – by a full dollar. Dumais told lawmakers that if that tax hike goes though, NH might be best served standing pat, a move that would give retailers a $1.43 per pack discount.
"We believe that if you don’t raise the tax at all. The advantage that you see will be a 30 million dollar increase."
Lawmakers seemed willing to accept that arguement to a point, saying they’d consider holding off the on the tax hike so long as retailers hit revenue targets…….On the wine front, compromise might prove more elusive……Facing pressure from wine sellers, Liquor commission chairman Mark Bodi has already re-jiggered Lynch’s original plan once. Instead of a straight 50 percent cut in their discount, Bodi is now looking to exempt retailers who buy less than $100,000 of wine a year…….
"So that would mean that of all the licensees, we have about 1140 or so, only 37 would be affected."
But despite Bodi’s assurance that the plan would leave wine specialty stores and mom and pop retailers untouched, wine merchants weren’t buying it.
"If this bill goes through as proposed, I will probably close my doors."
Boyd Bush owns the Abbey Cellars wine store in Lincoln. He says his shop, which stocks wines not sold at most state liquor stores, requires a 20 percent discount……..Bush and other wine merchants say preserving that rate only for smaller stores discourages wine businesses from growing. The house finance committee will vote on these changes, and revenue enhancements proposed by the Governor on Thursday.
