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New Tax Levies Hit Operators of Casinos

NEVADA -- It's tough to find beer and liquor drinkers or cigarette smokers who'll admit new state tax increases will affect their habits, but the two biggest locals casino operators estimate they'll spend about $800,000 on the new levies.

A 75 percent tax increase on beer and liquor took effect on Friday. The increase is projected to generate about $30 million in additional state revenue by June 30, 2005.

Cigarette taxes jumped 45 cents per pack and now total 80 cents per pack, a big chunk of a pack's price. The tax increase is expected to raise $63 million by June 30 and another $70 million in fiscal 2005.

Cigarette taxes were immediately passed through to customers, retailers said.

"At some point all of these taxes are passed through to consumers," Herbst Oil general counsel Sean Higgins said Monday. "And at some point, consumers are going to get fed up and stop buying (these taxed) products."

Herbst Oil owns about 70 Southern Nevada convenience stores and gasoline stations and sells a lot of cigarettes and beer.

But customers at the Terrible Herbst outlet just west of Interstate 15 on the north side of Russell Road said Friday that the tax hikes made no difference to them.

"Five cents a six pack?" they asked when told of the new beer levy, before affirming their intent to keep buying beer.

Shoppers in the beer aisle at the Smith's grocery store northwest of the corner of Tropicana Avenue and Jones Boulevard on Saturday similarly said the new nickel tax wouldn't affect their suds consumption.

"It's summer in Las Vegas," they explained.

A weekly sale at Smith's lowered the price of most Miller-branded beers by about one-third, to $2.99 per six-pack, yet many consumers cited brand loyalty and passed up the bargain price in favor of regular-priced Budweiser and Coors products.

The smoke shop at the Station Casinos-owned Wild Wild West hotel-casino immediately raised its cigarette prices when the new tax levy took effect, but sales haven't been affected, Station spokeswoman Lesley Pittman said.

The locals casino giant said the company is still assessing the impact of the new beer and liquor taxes.

A substantial portion of the beer and liquor used by casinos is given to customers at no charge. Station expects to end up absorbing the taxes on comped drinks, but has made no decisions yet about whether to raise prices on drinks it sells.

"It's about a $500,000 annual hit," Pittman said, estimating the impact of the beer and liquor tax increase on Station.

Coast Casinos executives said the west-side locals operator is still compiling the numbers to determine the impact of the new taxes.

The company's preliminary estimate is that the new taxes will cost Coast about $300,000.

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