Retailers Want To Extinguish Proposed Cigarette Tax Hike

Al Campbell does not smoke, but his friends do. He lives in Washington, D.C. When he passes through North Carolina, he stocks up on cartons for them.

"It's much cheaper here," he said.

North Carolina has the lowest cigarette tax in the country. Many retailers, especially along Interstate 95, count on people from out of state. If the cigarette tax goes up, they are afraid they will lose big business.

Alan Horne, who manages JR Discount Outlets, said 90 percent of his customers live out of state. Each year, JR sells about 7 percent of the cartons sold in the state. When it comes to taxes, the business accounts for even more -- $14 million or roughly 36 percent of the state total.

Horne believes if fewer people stop to shop, restaurants and hotels will suffer also. The state may get more cigarette money, but less in sales tax.

"On Interstate 95, you can just keep going north or south and not stop here," Horne said.

Proponents of the bill disagree.

"I think that you are going to find that what you have to look at is the bigger picture than six months from now," said Sen. Eleanor Kinnaird.

There are two similar bills on the table. One in the House finance committee. The other is in the Senate finance committee. Lawmakers will decide whether to recommend the bills to their respective places.