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Politics & Government

Tobacco Tax May Have Local Businesses Moving

Cook County is looking to increase taxes on cigars and loose tobacco - something that is currently taxed relatively low. The new tax, however, may be high enough for local tobacco shops to leave town.

New and proposed taxes on tobacco products sales are projected to have a negative impact on Skokie retailers – and could force one local institution to move out of Cook County.

Cigar King, a 50-year business institution in downtown Skokie, projects big problems over a county levy, taking effect March 1, that taxes big cigars 30 cents each and smaller cigars  5 cents apiece.

Meanwhile, Smokes and Such, 3439 Dempster St., is expected to join in a fight against new Senate legislation that would classify the business as a cigarette manufacturer due to their use of a machine that rolls cigarettes. Individual smokers employing the machine can create a carton of cigarettes for about $28 – a third of the cost of a pre-packaged carton at retailers.

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The situation seems most critical for Cigar King owner Jordan Hirsh, who said the new county tax on cigars “could make my business move … I’d have to move out of Cook County.”

Hirsh is yet looking at new locations on the other side of Lake-Cook Road in Deerfield or Highland Park. “I’m waiting to see what happens before I make a decision,” he said. But he does not seem optimistic over expected price increases on cigars, the core of his business.

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“The county is really making a bad decision on this,” Hirsh said. “If they want to drive the businesses out of town, this is it. You can’t have the highest costs of everything and be the best business. The business climate in Cook County is really bad for my business. If you have Cook County and other entities working against you, you cannot be successful.”

Hirsh feels he is already under the gun from a Skokie ordinance that would forbid indoor smoking, the pastime for regular customers sitting in reclining chairs at Cigar King, if the business closed and re-opened at another location within Skokie.

“The reason people move out of town when they retire, it’s too expensive,” he said. “If I would move the store, I would not move it (elsewhere) in Cook County. How much higher can they raise them? It’s shocking how high they are already.

“I have such a good customer base,” he added. “I’m blessed. It’s a pretty decent business.”

Two tobacco businesses, including Northbrook wholesaler Arangold Corp., have already filed suit in Cook County Circuit Court trying to stop the tax from being implemented.

Marcia Smith, co-owner of Smokes and Such, does not expect to have to move as a result of the new tax. Cigars are a relatively small part of her business. Her big concern is the proposed national legislation, which she said was created “under the radar” by a lobbyist for the big tobacco companies, that would take aim at the do-it-yourself cigarette-rolling machines.

Smith’s machine can roll 200 cigarettes in 10 minutes. Customers thus could buy a carton of cigarettes for $27, compared to $78 for the pre-packaged counterpart across the street at CVS.  If successful, the legislation conceivably could double the price of the rolled package by applying the same kind of taxes to a retailer that are paid by a big manufacturer.

“We’re having everyone e-mail (Congress),” Smith said. “We didn’t know what was going on. The bill says we’re cigarette manufacturers. It just slaps taxes on.”

She said the long-term result would be similar to the dire forecasts of Hirsh and others – an emigration of business out of the county and state.

“It takes business out of Illinois,” Smith said. “The gain (in tax revenue) will not be as significant as the loss (in business).”

Read more: WATCH: $28 For a Carton of Cigarettes in Cook County?

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