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Smokers, prepare to pay more for cigarettes in Minnesota on Jan. 1

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The cost of a pack of cigarettes in Minnesota is going up on the first of the year. The state's cigarette tax rates are increasing so smokers will pay $3.54 in taxes on each pack of cigarettes, which is about a 12-cent increase over 2015, according to KSTP.

Minnesota's cigarette taxes are among the highest in the nation, and that's by design.

In 2013, the Legislature raised the tax on cigarettes by a whopping $1.60 per pack, and also decided those taxes would increase every year based on inflation.

The goal is to keep young people from taking up the smoking habit in the first place, and to push smokers to quit. The average price for cigarettes in Minnesota is a little over $8 a pack.

But small businesses in Minnesota are unhappy about the tax hike, saying it'll cost them revenue, KSTP notes.

Lance Klatt, the executive director of the Minnesota Service Station & Convenience Store Association, wrote a recent commentary in the Star Tribune saying many small retailers in border areas are suffering.

"Tax increases will continually force Minnesotans who legally smoke to seek out less-expensive outlets to avoid the state’s high tobacco tax rate," he wrote. "Today, that is a simple drive to a neighboring state to buy cigarettes along with other consumer products."

This map compares the excise tax each state in the region charges for a pack of cigarettes (in cents). Minnesota, at $2.90, is the highest of all of them. That portion of the tax will go up to $3 on Jan. 1.

Klatt is calling for the state to repeal the automatic increases in cigarette taxes, arguing the state's current budget surplus is an indication the extra revenue isn't necessary.

More about the cigarette tax

Minnesota actually imposes two different taxes on cigarettes, the Minnesota Department of Revenue notes.

One is the excise tax, which will increase from $2.90 per pack to $3 per pack in 2016. That's the tax that is typically compared to other states.

The other is the sales tax, which will be 54.3 cents per pack in 2016, an increase of about 3/4 of a cent over 2015.

Minneapolis restricts flavored cigars

New restrictions on the sale of flavored cigars go into effect in Minneapolis come Jan. 1 as well.

An ordinance passed by the City Council back in July bans most retail stores from selling flavored tobacco products, including fruit-flavored cigarillos, beginning on New Year's Day. 

Flavored tobacco will only be available in the city's 15 traditional tobacco stores, which get at least 90 percent of their revenue from tobacco, according to KARE 11

But the city also raised the prices on those small smokes – again, to help discourage young people from taking up the habit.

A single cigar will cost $2.60, and the minimum price for a pack of four will be $10.40. Right now, you can buy a pack of three small cigars for $1 or less. 

St. Paul, Bloomington, Brooklyn Center and Maplewood have also passed similar ordinances, according to KARE. 

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