Vape shops close

A sign hanging at the Fat Cat Vapor Shop in Montoursville. Owner Chris Hughes said he plans to close at least a week prior to the 40 percent e-cigarette tax taking effect on Oct. 1.

(Submitted photo)

Cigarette smokers and Netflix subscribers will pay more money for their habits starting Monday as Pennsylvania begins to roll out a series of new taxes.

Those measures were part of a revenue package passed by the Legislature and signed by Gov. Tom Wolf to fill a $1.3 billion hole in the state's new $31.5 billion budget.

On Monday, smokers will pay $1 more per pack -- to $2.60 -- in state taxes on cigarettes. The existing 6 percent sales tax will also be extended to digital downloads and subscription services like Netflix and Hulu.

The cigarette tax is expected to raise an estimated $431.1 million in revenue while the sales tax on digital downloads could bring the state nearly $47 million.

Magazine and newspaper subscriptions, as well as digital versions of the Bible, will be exempt from the digital downloads tax. It will be triggered when a customer uses an account with a Pennsylvania billing address.

A tax of 55 cents per ounce on smokeless tobacco and roll-your-own cigarette materials, as well as a 40 percent tax on the wholesale price of e-cigarette supplies, will roll out starting Oct. 1.

Vape shop owners across the state have said the latter tax will lead to the inevitable closing of their stores. The problem, they say, is the law's "floor tax," on the inventory left in their shops on the first day of the tax.

"It's almost as if the tax was designed to kill small business," said Chris Hughes, owner of Fat Cat Vapor Shop in Montoursville.

Hughes estimated that he would have to cut the state a $40,000 check for the $100,000 in inventory he currently has on hand.

But he's working fast to ensure that doesn't happen.

Since the tax was announced, Hughes has rolled a 12-percent discount across his entire store and has even put his artwork and other fixtures up for sale.

Chris Hughes, owner of the Fat Cat Vapor Shop.

The plan, he said, is to have everything liquidated and his store shuttered a week prior to the Oct. 1 implementation of the vape tax. His goal is to raise enough money to pay off his outstanding loans.

"It broke my heart," he said. "I came in here on my off and put price tags on the artwork i have in here. Some of the things I'm selling off were personal gifts given to me."

Hughes, whose last job was working as supervisor at a car wash, said he doesn't have any long-term plans beyond his shop's closing.

"I had a lot of jobs I was O.K. at in my life," he said, "but this was the only thing I found in my 51 years that I really loved and was good at."

Wallace McKelvey may be reached at wmckelvey@pennlive.com. Follow him on Twitter @wjmckelvey. Find PennLive on Facebook.