New Regulations May Force 'Roll Your Own' Stores Out Of Business
President Barack Obama signed a new Transportation Bill late Friday that included a provision that may force many "roll your own" cigarette stores around the country out of business.
Those stores took advantage of previous IRS excise tax rules that taxed loose cigarette tobacco at much higher rates than loose pipe tobacco. Roll your own tobacco has a federal excise tax of $24.78 a pound, while pipe tobacco's excise tax is only $2.83. The federal excise tax on manufactured cigarettes is $1.01 per pack.
Florida has an excise tax of $1.39 per pack in addition to the federal tax. Florida has no tax on cigars. The RYO stores manufacture cigarettes in rolling machines using lower taxed pipe tobacco.
Roll your own stores additionally were previously not classified as manufacturers and did not have to apply normal rules including health warning to packages, reporting requirements, package sizes, and prohibition on selling flavored products.
The final effects on local 'roll your own' stores selling cigarettes at discount prices is not yet clear. It would appear that stores may sell rolling machines to customers for their own personal use, but will not easily be able to use the machines any longer for rolling pipe tobacco for customers.
The new law amendment reads:
SEC. 100122. ROLL-YOUR-OWN CIGARETTE MACHINES.
(a) In General- Subsection (d) of section 5702 of the Internal Revenue Code of 1986 is amended by adding at the end the following new flush sentence:
`Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.'.
(b) Effective Date- The amendment made by this section shall apply to articles removed after the date of the enactment of this Act.
(a) In General- Subsection (d) of section 5702 of the Internal Revenue Code of 1986 is amended by adding at the end the following new flush sentence:
`Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.'.
(b) Effective Date- The amendment made by this section shall apply to articles removed after the date of the enactment of this Act.
I worked at a SMOKE AND SAVE in Indianapolis and lost my job due to this. I can only imagine that thousands of more people will be losing their jobs, and in their greedy desire to collect more taxes, they've directly shut down hundreds of shops who were paying state taxes. It's idiotic and clearly a sign of bedfellows with Big Tobacco and corporate control. I hadn't worked there long enough to draw unemployment, so hopefully I can find something else in this terrible, terrible job market...
ReplyDeleteI feel your pain, and I must agree its becoming more and more disgusting to see the government become more and more greedy by killing the little guy trying to make a living. Its such a tough time for many Americans. I invested money I have saved for a long time to try to get this business going. This has now been passed and here we are with these machines that we paid for and no one is going to help us unload them. If you look at the machine it says proud to be made in the USA. Well to add to that on the outside of this machine I say "also proud to be screwed by the USA" Good luck to you buddy and yes this will impact a lot of people and nothing will be done about it. Its becoming a sad and mad world very quickly......
ReplyDeletewhat happened to free enterprise?
ReplyDeletejust wait until the feds start monintoring your heath condition for 24/7 under the the federal heath care plan. EVERYTHING will then be controlled that goes into our bodies and what is deemed bad for you will be taxed just like tobacco. This will be here in 5 years!
ReplyDeleteTHIS IS SOCIALISM!. By controlling the means of production and consumption using administration and regulation. wake up! were does it end? I say this is taxation without representation. i don't see a smokers Representative in congress. Am i missing something?
ReplyDeleteThis new bill took between 10,000 and 14,000 away. I call it a job killing bill. Way to go Pres. I found a new way to deal with it. ryocigs dot com
ReplyDeleteRoll Your Own are also called RYO, MYO,rollies, roll-ups, hand-rolled cigarettes, or simply rolls, thus ryocigs is roll your own cigarettes.
ReplyDeleteYou realize this has nothing to do with socialism don't you? It has nothing to do with monitoring your health. Did you even read the blog? It was tagged to the end of a transportation bill. There's a 50% chance it was penned in by a republican. considering this sounds like it came from the south and is pro big business there is even a greater chance that this was penned by a republican. I recommend that everybody takes a deep breath and does a little research. while you are at it you might as well read up on ear marks and how the american government works. you might want to look up the definition of socialism is well
ReplyDeletei am a smoke shop owner i agree with the bill because is not fair for the other smoke shops or convenience store does not have it but only one per area or 500 miles fair from each other on top of that it cost $35,0000 dollars to purchase the machine if they were smart a enough they let every body have it and a cheaper price know its illegal and every body who have the machine is stock with it and more businesses is goingout of business
ReplyDeleteNo, it was penned in by Max Baucus, a Democratic Senator of Montana. Montana just so happens to be a state without any RYO businesses. Also Baucus recieved donations from Altria, a parent company of Philip Morris. This is nothing more than corruption in our government. Big tobacco spent something to the tune of 20 million dollars on lobbyists in June alone to get this penned, and you can bet a lot of that money was used to give "donations" to the members of our Congress. Our government has been purchased.
ReplyDeleteSOCIALISM by a democrat "within the transportation bill, an amendment by Montana Senator Max Baucus, a Democrat, effectively wiped out another business entity, Roll-your-own (RYO) cigarette operations which will affect thousands of employees."
ReplyDeleteHa, they don't even hide it anymore.
ReplyDeleteIt is a shame. I don't smoke but purchase these products for my wife. Why haven't anyone mentioned what's not in these cigarettes.NO FSC. Fire safe chemical. Additives etc. Smoking is not good but this is a safer alternative. I buy tobacco by the pound and my wife rolls using tops machine. The smoker's cough/hack is gone. Good luck TIGHT WAD TOBACCO. John "the nurse".
ReplyDeleteAnonymous said...
ReplyDeleteListen to all the Neo- Nazi's talk about SOCIALISM- How funny!
sign
Mike Callahan and Nancy Owensbarger
Lover's 4-ever after they dry off!
Neo-Nazi? First you call me a socialist and then call me a fascist? either you failed social studies in grade school or you enjoy being an internet troll. please, if you are old enough to vote, educate yourself prior to the november election. it is every american's duty to be well informed before they cast their vote. regurgitating the dribble you hear or talk radio is not sufficient.
ReplyDeleteThis is not a socialist issue, a fascist issue, a republican issue or a democrat issue. the issue is that the american government is broken and corrupt regardless of party affiliation. if you remember, the united states government is made up of three branches (look it up), the most broken and most responsible for our problems is the legislative branch. Again, please educate yourself or take a class or two before voting. I'm glad you're passionate, I just wish you had a clue
These business that have closed down due to this new bill didn't want to keep their stores open I guess. Why couldn't they sell the "means to roll your own" It only takes 5 minutes with a manual machine to roll a pack of smokes! Looks to me that these companies gave up to soon, there are other options out there that could of keep the $$$ rolling into thier shop! What a shame these business owners closed down and caused many people to loose thier jobs when the solution was very simple. Sell other products!!!
ReplyDeleteTo all of you crying about it being a *tax increase* - if you werent so lazy you could roll your own at home for even less cash. All cigarette companies are held to the FSC standard so why shouldnt the ryo shops. If you make it at home you can be FSC free
ReplyDelete