September 25, 2012 (Omaha, NE) — A recently proposed occupation tax in Omaha, Nebraska threatens to levy a 7% tax on sales of all tobacco products. The International Premium Cigar & Pipe Retailers Association (IPCPR) strongly opposes this “specialty tax” as it will be detrimental to area premium cigar and pipe retailers.
The tax is designed to raise funds for a University of Nebraska Medical Center (UNMC) expansion. UNMC has $1.2 billion dollars available, which is more than enough to pay for the project. Taxpayers are wondering why they are being forced to fund the university’s expansion.
The IPCPR fears the tax can lead to “border bleed:” the movement of sales from local businesses to neighboring shops as well as to online and mail-order retailers in order to avoid onerous taxation. Small businesses, including premium tobacco shops, are extremely sensitive to swings in economy and taxation. Adding on yet another tax only compounds the problem in an abysmal economy and increases stress on businesses by driving sales out of the city.
“The tobacco industry is not a bottomless well for taxes, fees and the like. We are mom‐and‐pop, Main Street businesses in an industry struggling to survive under increasing scrutiny ad attacks from our very own elected officials, who we elected to defend us. The people who work in this industry shouldn’t have to go home every night fearing that their jobs are being regulated or taxed out of existence every time the government has a project they want to complete” said Bill Spann, CEO of the IPCPR.
This city-forced tax will certainly prove challenging as businesses struggle to regain footing and grow in this economy.