At the turn of the 20th century, gentlemen strolling downtown Salt Lake City streets could stop at several smoke shops to buy an array of cigars made in a dozen factories in town.

Today, only the historic Jeanie's Smoke Shop at 156 S. State St. remains.

But owner Gary Klc says he will have to close the business in June -- just before a new tobacco tax takes effect July 1.

That's the date by which Klc must come up with $125,000 to cover the higher tax on his existing inventory. Klc says it's too big an investment for products that will be taxed at some of the highest rates in the nation.

"When I think of my customers and suppliers, I feel like I'm losing my best friends. It's like I'm going to a funeral," said Klc, 50. "It's been a hard decision. I grew up in this store so I get pretty emotional."

Sen. Allen Christensen, R-North Ogden, who fought for years to raise Utah's tobacco tax, said he understood that distributors would have to pay the bill, not retailers. But Charlie Roberts, Utah Tax Commission spokesman, said retailers indeed must pay the higher tax and yes, it will come due when the law takes effect this summer.

"If that's the way it is, then so be it," Christensen said. "I'm sorry for some of the businessmen the law will impact, but they're selling a deadly product."

He also predicted Jeanie's Smoke Shop and other retailers "will somehow come up with that money anyway."

Klc (pronounced Kelch) said there is no chance he can stay in business. He said he has a loyal customer base that has helped him maintain sales during the downtown construction, but Klc also has the largest inventory of any retailer in the state, making it impossible for him to sell off his stock before the tax bill comes due. The tab he will have to pay will be the difference in the current tobacco tax of 35 percent of the manufacturers' sale price and the higher rate of 86 percent to be levied in July.

Hungry Trout Cigars and Smoke Shop owner Kendrick Woolstenhulme, said he hopes he can stay in business, although he probably will owe an additional $25,000 from the existing stock at his Sandy store.

"I won't be ordering any more inventory, and I'll deplete as much stock as I can," he said. "And if I still can't pay the tax bill on July 1, the only option I have is for the state to come after me."

State officials say they haven't decided exactly how they will enforce the law. But retailers won't be given special payment options.

Klc, with Jeanie's Smoke Shop, said he began making plans to close after learning Gov. Gary Herbert indicated he doesn't intend to veto the tobacco tax hike. The Legislature has built the $44 million in anticipated tobacco tax revenue into the budget, and Herbert said a veto would undo that balance.

Herbert has until March 31 to take action on the bill. If he does nothing, it becomes law without his signature.

Klc's business, the oldest smoke shop in the state, dates to the 1940s when his late father bought out the old United Cigars store on State Street. Although the shop moved as the city grew, the store has always been in downtown Salt Lake City. Through the years, the shop's name also changed, finally to Jeanie's in honor of Klc's mother. But it's a misspelling. When Klc's mother Genie explained to a contractor that she wanted a genie coming out of a pipe bowl on the store's sign, he spelled the name "Jeanie."

Gary Klc was the only one of seven children who decided to go into the family's tobacco business. Genie and her children are Mormons, whose faith prohibits use of tobacco.

"I believe in personal choice and free agency," said Klc, an active Mormon and a nonsmoker. "But it wears on me when people label me a baby killer."

Klc employs four people, including a worker who repairs pipes.

The business was not much different from other 19th century enterprises in the Utah territory. When the pioneers first arrived, Mormon Church President Brigham Young dispatched families to southern Utah to grow cotton, sugar -- and tobacco.

dawn@sltrib.com