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NEWARK, Del. -- July had the potential to be a bad month for convenience store owners on the southern side of the Delaware/Pennsylvania border.
With Pennsylvania joining the multi-state Powerball lottery, long lines that appear outside Delaware stores when the jackpot tops $100 million were on the verge of shrinking, and taking sales with them, The News (Del.) Journal reports.
But then a new tax hike went into effect in Pennsylvania on July 15, more than tripling the cigarette tax to $1 per pack. And tobacco sales at some Delaware border stores rose along with it.
A pack now costs up to a dollar more in Pennsylvania than in Delaware, where the cigarette tax is 24 cents a pack. The price of a premium pack of cigarettes at a 7-Eleven in Chichester, Pa., costs at least $4, while a premium pack at a 7-Eleven just outside of Wilmington, Del., costs about $3, the report said.
In addition to Pennsylvania, New Jersey raised its cigarette tax from 80 cents to $1.50 per pack on July 1, while Maryland boosted its tax from 66 cents to $1 per pack a month earlier. Delaware's governor had asked the General Assembly to approve a 35-cent-per-pack increase but later withdrew the request.
The higher price has some Pennsylvania smokers crossing the Delaware border, and local store owners and managers couldn't be happier.
"Our [cigarette] sales are double than before," said Gary Singh, manager of an Exxon Tiger Mart in Brandywine, Del.
Mohammad Rahman, franchise owner of a 7-Eleven in Brandywine, said he is confident the 20-percent spike in tobacco sales at his location after the Pennsylvania tax hike went into effect wasn't by chance. He said he expects sales to stay high "as long as the tax situation exists."
Other stores near the border are reporting similar increases, particularly for cartons. Jason Doody, manager of the Fairfax News Stand, said his store, which usually doesn't sell many cartons, experienced a surge in carton sales as soon as Pennsylvania's tax increase took effect, the report said.
In Pennsylvania, sales are down by half at the Chichester 7-Eleven, which is just a mile from the state line. "Everyone goes to Delaware now," said employee Ray Ramanathan.