New Indiana cigarette tax sends smokers — and sales — across state lines

JEFFERSONVILLE, Ind. (WDRB) -- A new cigarette tax in Indiana is burning a hole in smokers' pockets — and some say it's driving business across the river.

The tax increase, which took effect July 1, adds up to $2 more per pack. That puts the cost of a single pack in some southern Indiana locations at nearly $14 — prices some compare to New York City.

“They're 14 dollars a pack... I mean, they're the prices that they are in New York,” said Sara Paskitti, a southern Indiana resident.

Paskitti believes the increase is an effort to get people to quit altogether.

“I think it's just they're trying to get everyone to stop smoking. So they're making it so outrageous that no one can," she said.

Rather than quit, some smokers are simply crossing state lines to get a better deal.

“I just think it's going to cause people to cross the state line. That's what my stepdad does,” Paskitti said. “It's the economy the way it is.”

Shane Puryear said the price of his usual brand nearly doubled.

“I smoked LD cigarettes, and they were, like, $4.38 a pack… they jumped up to $8.14,” Puryear said. “I’ve never bought them by the carton. So I’ve been trying to use the e-cigs and just stay away from them.”

But even as some consider quitting, others are just going to Kentucky — where cigarette prices remain lower and no new tax has been added.

“It sucks. Yeah. I don’t like it. I was pretty mad when I seen that jump. I was like, man, been buying these for $4 for like five years,” Puryear said.

Retailers said they’ve noticed the impact almost immediately.

“Daily. We sell cigarettes all day. Yes, constantly,” said Shelby Niece, who works at a Circle K in Jeffersonville.

She said many of their regular customers have either cut back or disappeared entirely.

“A lot of our regulars are not buying as many packs — and if they're even coming in at all,” she said. “A lot of them are just going to Kentucky.”

“We’ve got a lot of complaints about it. Everybody’s wanting to speak to us about it, and tell us how they feel. They want to quit. They're mad,” Niece said. “Two dollars is a lot on a pack of cigarettes. That’s 20 to 30 dollars on a carton.”

Next door, another southern Indiana retailer is hearing similar frustration from customers.

“It’s definitely a big impact on the cigarettes,” said Asrsh Singh, who works at 5 Star Smoke Shop in Jeffersonville. “Customers who just want to spend four or five dollars — right now it’s $6.35.”

“They just go into Kentucky across the bridge,” Singh said. “They don’t want to spend two dollars more here.”

The new tax is expected to generate millions in revenue for the state of Indiana. Lawmakers say it's both a public health effort and a funding source for state programs. But for small business owners and longtime smokers near the state line, it’s a price they may not be willing to pay.

It may sound like he's just blowing smoke, but Puryear said, “I think it’s time to quit.”