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With cigarette tax imminent, sales catch fire as smokers stock up to save bucks

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With less than a month before a new cigarette tax will raise the price to hack by $1.60 a pack, Twin Cities tobacconists are seeing a boom in business they fear will soon go bust.

As Minnesota Public Radio reports, at places like Maplewood Tobacco smokers have "been buying like crazy" -- customers snagging 10 or 20 cartons at a time -- before the law, passed earlier this year during the legislative session, goes into effect.

"The sales [are] going to be rising until July 1," the owner tells MPR. "Once the increase is already there, I think our business is going to die. It's going to be a huge problem. It's going to be a life changer, I think, for a lot of business owners like me and others."

While KSTP-TV reports that Minnesota Revenue Commissioner Myron Frans says he's confident the state will hit its tobacco tax-revenue projections, others are worried of either a black market cropping up, or business simply going to the surrounding Dakotas and Iowa. As for that other neighbor, cigarette sellers in Minnesota will lose the competitive advantage they had over Wisconsin, PR reports, where the cigarette tax is $2.52 a pack. In Minnie, the hike will make the total tax $2.83 a pack.

"All of the people who buy the big bulk of cigarettes are coming from Wisconsin, so we are losing 70 percent of the sales in cigarettes in this location," one Oakdale cigarette seller tells MPR.

The station points out that North Dakota's cigarette tax is 44 cents a pack; South Dakota's $1.53; and Iowa's $1.36. The biggest price difference will be between Minnesota and North Dakota. Starting July 1, a pack of smokes for $5 in Fargo will cost $8 across the Red River in Moorhead.

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