Showing posts from June 19, 2010

Governor Paterson's Proposed Tax Hike on Tobacco is Outrageous, Irresponsible and Revenue Negative.

Ignoring once again the crippling financial burdens facing New York’s small businesses, the newest proposal by Governor Paterson to increase the Other Tobacco Products (“OTP”) tax from its current 46% of wholesale to 75% is outrageous, irresponsible and revenue negative for the State.

Just over a year ago, the State of New York implemented an OTP tax increase from 37% of wholesale to 46% of wholesale. This increase put New York State’s OTP tax significantly higher than the OTP tax of neighboring states. Comparing the first quarter of 2010 to 2009, Professional Tobacconists across the state of New York lost a devastating 20-30% in customer transactions. But don’t be fooled, these customers have not quit enjoying their premium cigars or pipe tobaccos, rather they simply buy their tobacco elsewhere, either in a neighboring state or online. Further increasing the OTP tax will only continue to drive customers away from New York, resulting in a loss of not only OTP tax but also sales tax, a…