Iowa legislature considering tax hike on loose tobacco - KWWL - Eastern Iowa Breaking News, Weather, Closings

Iowa legislature considering tax hike on loose tobacco

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WATERLOO (KWWL) -

A bill being considered in the statehouse would hike taxes on loose tobacco, the kind to roll your own, to the same rate of a pack of regular cigarettes.  Lawmakers supporting the measure say it's only fair, that all tobacco products should be equally taxed.  But smoke shops are concerned more taxes could be bad for business.    

Eric Maybon's been buying loose tobacco to roll and smoke his own cigarettes for more than two years.  He made the switch mostly because it's much cheaper.

"You get cost savings and you get better tobacco, a lot less additives and they're better for you," Maybon said.

Traditional loose tobacco has become very costly, after a recent spike in its federal taxes.  So now dual purpose pipe tobacco, that can also be used to roll cigarettes, is becoming a popular, cost-friendly alternative.  Sales have been boosted further as new electronic machines make rolling your own easier than ever.

"We don't sell near the cigarettes we used to sell.  With the pipe tobacco and dual purpose tobacco, it has really increased.  You can smoke for around $1.25 a package versus $6-7 on a cigarette like a Marlboro or a Camel," said John Eveland, owner of National Cigar Store in Waterloo.

So taxing loose tobacco to the rate of regular cigarettes, which might make a $22 package cost $100, could be very bad for businesses like the National Cigar Store, which has also seen a boom in online sales of the product.

"I'm concerned they're going to tax us out of the market.  And what are they going to tax after they don't tax cigarettes?" Eveland said.

But groups like the American Cancer Society say there are ample benefits to increasing tobacco taxes.

"Lung cancer's the most preventable form of cancer and death that we have currently with us right now.  And increasing the tax could easily help us prevent that, and make it a little harder, especially for youth and younger adults, to begin smoking if it's a little bit higher price for them," said Kelly Warren, American Cancer Society spokesperson in Waterloo.

But ultimately, the decision on whether loose tobacco taxes are hiked lies with the Iowa legislature.

If the hike is approved, it could generate thousands in new revenue for the state.  And in Iowa, that money goes into the Health Care Trust and state general fund for various projects.

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