For the record, Shayne Meskimen is not a smoker.
But he's a little burned up with the way a new 52-cents-a-pack tax on cigarettes went into effect last Thursday. House Bill 407, which raised taxes on cigarettes and other tobacco products, was passed on the final day of the Legislature.
Meskimen, owner of Lockwood IGA, said a Department of Revenue letter notifying him of the tobacco tax increase arrived in the mail Wednesday. That gave him less than 12 hours to change the prices on thousands of cartons and single packs of cigarettes, not to mention cigars and packages of smokeless tobacco that were also affected.
Even with a computerized inventory system, raising the price for tobacco products isn't a matter of pushing a button on your computer, Meskimen said.
"You have to punch in every one of those numbers because every product has its own bar code," Meskimen said. "There was no time allocated to give merchants time to prepare for the higher tax. If they had said the new tax would have gone into effect June 1, that would have given us time to prepare for it."
Because of the late notice from the state Department of Revenue, Meskimen said, he didn't get the prices changed by the time the new tax kicked in Thursday. As a result, he lost about $6 for every carton of cigarettes that he sold on Thursday because he'll have to pay the higher taxes for all cigarettes sold that day.
"It put a real bind on us at the retail level. We've got a ton of other work to do," Meskimen said.
The state Department of Revenue is requiring all 2,500 retail merchants of tobacco products to conduct an inventory of their tobacco stocks. Merchants must pay additional tax on the tobacco products they had in inventory before the new tax went into effect May 1. Merchants must provide the Department of Revenue with an inventory report and tax payment by June 30.
"This shows why we're broke as a state," Meskimen said. "It shows their lack of organization and the fact that they were grasping at straws."
Neil Peterson, administrator of the Department of Revenue's Customer Service Center, said the department tried to inform merchants about Senate Bill 407, the revenue bill that included the new cigarette tax, as quickly as possible. The late notice to merchants reflected the fact that the new tobacco tax was approved by the Legislature on April 26, the final day of the session, and was signed by Gov. Martz on April 30, Peterson said.
Peterson said the department mailed a "heads-up" letter informing merchants of the potential tax increase on April 25. Another letter was sent to merchants on April 28.
"It was short notice," Peterson said. "We tried to do the best we could given the circumstances. We did receive a few calls about the short notice and people upset about having to change the price of cigarettes."
Other merchants said they weren't overly inconvenienced by the tax increase.
"We knew that we would have to do an inventory so we didn't have a problem with it," said Jill Olson, manager of the Tobacco Country store on Main Street in Billings.
Meskimen said it was difficult for him to respond quickly to the tax increase because tobacco represents a small share of the products he sells.
Meskimen believes the new tobacco tax is prejudicial because it targets a few Montanans. He also worries that higher taxes will encourage smuggling, in which people drive to Indian reservations or to states that have lower taxes and bring back tobacco. "That's happening in other states that have raised their cigarette taxes," Meskimen said.