New tobacco tax law closes Dubuque business - KWWL - Eastern Iowa Breaking News, Weather, Closings

New tobacco tax law closes Dubuque business

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DUBUQUE (KWWL) -- It's a sign of the times; some local businesses are closing their doors. But when it comes to tobacco products, most who sell them say it's a recession proof product. For Tobacco World in Dubuque, a new tax is taking products off their shelf for good.

It's not often you see sales signs like this inside a tobacco shop.

"We're just a small family business, basically did all the work bringing it up," said manager Jason Waddell.

Since 1992 Waddell's family owned their own business, today known as Tobacco World. Despite a tough economy Waddell says people are still buying cigarettes.

"People still want their cigarettes but more people want cheap cigarettes," said Waddell.

He credits that to the latest cigarette tax, effective April 1st. The tax raised the tax on a pack of cigarettes to $1.01. But that's only the state tax, another tax is causing these shelves to go empty.

"We figured it was gonna be a significant amount of money that we were gonna have to spend just to stay in business," said Waddell.

It's all thanks to a new federal tax on cigarette inventory is just too much for this family owned business to keep it's doors open. The new rule requires owners here to pay a tax on everything in there store, as it was new.

Meaning if cigarettes have been on the floor before April 1st, they are now taxed like they arrived here today.

"I don't thin the thought about the cause, about it effecting business," said Waddell.

Especially when it came to justifying more than $10,000 in additional taxes.

Now sale signs represent a local business, selling a recession proof production, closing its doors.

Tobacco World plans to close it's doors sometime next week, once all their inventory is sold.

As for the money from the tax increase, the billions of dollars raised will finance health insurance for 11 million children, including new clients of Iowa's Hawk-I program.

Online Reporter: Lauren Squires

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