During the meeting on lowering the New Hampshire tobacco tax, Republican Patrick Abrami, declared that the given move was need to help small businesses to strengthen a competitive edge in a lower cigarette tax with neighbor states. “We have reached the critical stage. We are affecting our merchants. We are loosing sales on our borders,” Abrami stated about the considerable increase in tobacco taxes that occurred since 2006.

According to data presented by the New Hampshire Grocers Association, tobacco sales surpassed more than $755 million in 2010 and the predominant theme among supporters of a measure to decrease the tobacco tax is a reduction of 10 cents a pack, from $1.78 a pack to $1.68 per pack, and consequently other tobacco products should be reduced at approximately 17%, thus assuring great state profits.

Encouraged by a recent study that estimated that reduced tobacco taxes will bring to more sales and more state profits by as much as $13 million, supporters of the tax decrease received a unanimous support in the House in order to pass the measure. At present the Senate is considering the bill. The state Department of Revenue Administration informed that a drop in tobacco tax will lead to estimated fall in profits ranging from $7 million to $14 million.

After business taxes and meals tax, collection from tobacco products sales accounts for the third highest origin of profit for the state budget. In March, the tax assessments constituted $9 million above profits estimates for fiscal year ending June 30. “It would excessively affect profits at a time when the state couldn’t afford it and the 10 cents per package reduction will produce little effect on attracting any more smokers across state boundaries,” said Gov. John Lynch. “We would have to sell more than 15 million packages of cigarettes in order to cause profit loss at a time when they are reducing services to the developmentally disabled. The reduction is also bad public policy as it would attract more young people to smoke tobacco products,” stated Colin Manning.

New Hampshire has increased its tobacco taxes significantly from 52 cents a pack in 2006 to the current $1.78. For example, in the closest state Maine the tax constitutes $2 a pack and in Massachusetts is $2.51 a pack. 50% of all tobacco purchases realized in the state are from out-of-state buyers.

John Dumais, president of the grocers association stated that 99% of his members support the tax reduction and suppose that it will bring to more additional sales and raised profits, which in their turn will lead to higher profits to the state with raised business profits taxes paid. He also said that a lot of convenience owners have criticized the tobacco tax increase as hurtful to their businesses.