This is Buzzy's Country Store blog designed to keep you apprised of what's going on at the Store. Buzzy's is a general store located in St. Mary's County, Southern Maryland near Pt. Lookout State Park. Buzzy and Jean Ridgell purchased the Store from Jean's father Harry Raley in 1953. Buzzy operated it until his passing in 2009. His son J. Scott Ridgell is the current owner.

Monday, March 8, 2021

Floor Tax (Not Talking Carpet nor Hardwood)

A few months after I took over running Buzzy's Country Store, the State tax bubbas sent me a notice (click here) stating the following increase in tax on cigarettes would take effect on 1 January 2008:

My first reaction was to talk to Buzzy and discuss how many cartons of cigarettes we should try to purchase and thereby get ahead of the 1 January increase.  He said "Don't even bother.  They charge you for the inventory that you already have.  It's called a floor tax. "  He went on to advise me that instead of stocking up on cigarettes, we should try and run our inventory as low as we could and thus avoid paying any more of a floor tax than we had to. 

Thus, my first introduction to what is known as a "floor tax."  

I tell you all this because Maryland legislature has just passed another increase in the state cigarette tax rate raising it from $2 to $3.75 (click here.)  This means that the floor tax on current inventory all businesses have on hand will now be $1.75 per pack and is due 1 July.  

It also means that overall Maryland sales of cigarettes will drop.  The drop will not necessarily be due to people quitting to smoke but because more and more of them will simply travel to and buy their smokes in Virginia where the State tax remains at 30 cents per pack (click here for State by State tax rate comparison.)

Musically there were no songs that I could find about a floor tax but was able to locate a bunch about smoking include this one from Boston:  (It does have the line "get your feet on the floor" (00:50 mark) but I'm pretty sure they're not talking about having to pay any additional taxes to do that.

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