The Fight is Not New to Members of SBSIA. This is a Letter to the DRA Commissioner Telling Him He Was Destroying Small Business.

Commissioner Kevin A. Clougherty
Department of Revenue Administration
P. O. Box 2035
Concord, NH 03302-2035


Dear Commissioner Clougherty,

You’ll be happy to know that one more business has been destroyed by a tobacco tax increase. Therefore, you’ll have less to enforce. It’s a “win-win” for you—our license as a “vending machine operator” is paid through June 30 of 2010. You can let the enforcement guys know over at the Liquor Commission that their attempts at “compliance exercises” are no longer needed at our house anymore—besides, being down to two machines over the last licensing period meant no cigarettes were ever kept at our house. Purchases of our tobacco products were accomplished on the way to stock our machines. Incidentally, a “vending machine operator license” means we didn’t have products available for sale to the general public anyway; we were not licensed for retail.

Our cigarette machines were not able to absorb the new prices, with the taxes imposed by the Federal government and the State of New Hampshire. Quite frankly, since lawmakers and commissioners rarely stand up for their licensed partners in business anymore, it was an easy choice not to replace the older machines with new machines to accomplish the ability to go over $6.00 a pack. We were fairly sure that no one from your department would be there to make sure cigarette vending machines would not be outlawed in the coming years. We stopped buying cigarettes last February. The last empty machine was pulled from its location on May 21.

Incidentally, when you fail to stick up for your licensed businesses, and forget that your department has the additional challenge of being a partner to your licensees, with the implied legislative charge of enabling the growth of said businesses, the end result can be that the state has less money, NOT more for its budget in the coming years. Prior to this business closing, we had a convenience store. Part of the reason we sold that business was to raise the funds to pay the tobacco floor stock tax. You may be interested to know as the taxes rise, sales slow down (particularly for those businesses that are not close to a border state); and since tobacco is not a returnable product for most Independent retailers, that means the “little guys” become “sitting ducks” for further taxes on their dusty, crunchy, “unsellable” and “non-returnable” stock. Since we are not the only business in Concord that has been subject to poor legislative decisions, we remain sure that anyone over in the Sweepstakes Commission can tell you what has happened to sales of lottery tickets in the Concord area, once the tobacco dealers went out of business. Our “out-of-state” buyers replaced their trips to New Hampshire with trips to the Indian Reservations in New York. We are sure that even those mathematically challenged members of your staff, as well as some lawmakers, will understand that a business that sells 2,000 cartons of cigarettes a week does NOT make more for the state by dropping to 35 cartons a week, over the period of less than five years—no matter how many times a cigarette tax is raised. It might be helpful, too, for you as a commissioner, to point out to less enlightened lawmakers, and special interest groups, that less sales of tobacco does NOT mean that more money will be spent on other products in a seller’s store—it means that tobacco customers no longer have any reason whatsoever to shop with that merchant, or possibly come to the state at ALL, and there will BE no associated sales.

Thank you for your time.

Very sincerely yours,


David & Kristie MacNeil

Kristie MacNeil is a Board Member of SBSIA