Minnesota’s Cigarette Loss Is North Dakota’s Gain

Cigarette border bleed is pronounced between Minnesota and North Dakota, the result of a $2.39 state tax differential.

January 16, 2014

FARGO, ND – Cigarette sales at Minnesota convenience stores are plummeting, KVRR Fox TV reports, with higher taxes sending many smokers to North Dakota to stock up on tobacco.

"Our highest is $9.50 or something like that, it's expensive cigarettes," said Rodney Helming, owner of the Oasis Convenience Store in Moorhead, Minnesota, a store less than a mile away from North Dakota’s border.

Helming said when state cigarette taxes increased $1.60 July 1, he saw his business steadily drift across the border. ?"Cigarette sales dropped 75%, we used to do 300 cartons a week, now we buy 70 to 80 a week," he said.

The cigarette tax in Minnesota is currently $2.83 a pack, versus 44 cents in neighboring North Dakota. As a result, Helming’s former customers are finding deep savings by simply detouring a few minutes from their daily routine.

"[The] savings is about $20 to $25 a carton,” said Grant Schmall, who buys at least four cartons at a time, saving $100, when he visits Fargo. And while Helming is trying to find ways to recoup his losses, the Petro Serve in Fargo where Schmall now shops for cigarettes is finding a growing customer base.

“I've had people call ahead can I have five cartons of this they pick it up when they come in," said Petro Serve’s Hans Swanson, adding, “We spend $15,000 to $20,000 in cigarettes a week.”

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