FEDS outlaw commercial cigarette rolling machines
Here we go again with the Federal criminals enacting laws to protect the money of Big Corporations at the expense of the consumer!
Feds shut down cigarette-rolling device
By Jim Phillips
Federal regulators last week ordered an Athens store specializing in bargain tobacco products to shut down a "roll-your-own" machine that it had been using to allow customers to turn loose tobacco into rolled cigarettes.
Kelly Barnes, manager of the Cheap Tobacco store on East State Street, confirmed that on Saturday, the store got an e-mail from federal regulators, ordering that it cease operations of its in-store rolling machine. The federal agency regulating tobacco sales is the Alcohol and Tobacco Tax and Trade Bureau.
"All we know is, we got an e-mail 15 minutes before we closed on Saturday, saying they passed a law," Barnes recalled. She would not provide a copy of the communication to The Athens NEWS, but said the gist of it was that it is now illegal to provide the use of a roll-your-own machine to customers.
"Only thing I know right at the moment is, we do have lobbyists in Washington, D.C., lobbying for us, and our attorneys are filing an appeal," Barnes said.
The Cheap Tobacco chain of stores has locations in Ohio and West Virginia, according to its website.
In the two or three months of operating the machine before being ordered to shut it down, Barnes said, "we got a lot of business on it." She noted that the price difference between buying loose tobacco and rolling it, and buying a pack of cigarettes, is huge.
"If you roll your own, we have figured it up, it's a little over a dollar a pack," she said. She compared this to a well-known brand of pre-rolled cigarettes that costs more than $5 a pack.
Barnes said the store has been given a phone number to file any complaints about the order. She said she considers the mandate excessive interference in her business.
"In my opinion, they've taken away enough of our rights," she declared.
A man from The Plains said he had been planning to open his own tobacco store in that community, and had even rented a storefront, when he heard about the federal mandate. He said under the new legal circumstances, he doubts he'll be able to go ahead with the planned business venture.
"There's a federal law against manufacturing cigarettes," claimed Wayne Savage. "And only the big tobacco companies are allowed to do that."
Savage, a smoker himself, said the change mostly impacts the poor. "Because of all the high taxes (on tobacco), poor people have been switching to the roll-your-own cigarettes," he said. However, he added, doing it by hand, "to roll cigarettes for yourself takes an hour a day." That's why machines like the one that had been available in Cheap Tobacco have become "extremely popular," he said.
"Oh, (this change) is definitely hurting lower-income people," Savage added.
Tom Hogue, spokesman for the Alcohol and Tobacco Tax and Trade Bureau, said there has been no new legislation on the issue, but after the agency became aware that cigarette-rolling machines like the one in Cheap Tobacco were coming into wide use, it reviewed the issue and decided to issue a ruling Sept. 30.
"It isn't that there's been a (legal) change," Hogue explained. "We basically put out a ruling that says, if you're engaged in this sort of activity, you're doing manufacturing under the definition of a manufacturer in the Internal Revenue code... It had reached a level where we had to say something about it."
According to the ruling, retailers offering customers the use of a rolling machine will have to meet Internal Revenue permitting requirements, obtain a bond, comply with record-keeping, reporting and inventory requirements, and pay tax on the rolled cigarettes.
Doug Kennedy, editor of the Oregon-based Roll Your Own magazine, said Wednesday he was rather surprised that authorities didn't act against the commercial use of the rolling machine in Ohio earlier, given that the state of Connecticut filed suit over its use about a year ago, the company that manufactures the device is based in Ohio, and it is most commonly used in Ohio and Michigan.
Kennedy suggested federal regulators may have been prompted to crack down if tobacco sellers have started selling pipe tobacco - which is taxed much less heavily than "rolling tobacco" - for use in the machine.
Kennedy said he personally doesn't believe use of the machine - of which he's no great fan, feeling people are better off truly "rolling their own" at home - should qualify as illegal cigarette manufacturing. He insisted, however, that "my opinion as to the legality of it is really irrelevant," as the issue ultimately will be decided by government regulators and courts.
"It's really walking a thin line, letting customers into a commercial establishment to use a vending machine," Kennedy suggested. He stressed that if the government doesinsist that the use of the rolling machine is a crime, it's a major offense. "Cigarette manufacturing without a license is a very, very serious crime," he noted. "It's a very big deal, legally and financially."
Thursday, Apr 7, 2011
NEW LAW WILL BAN COMMERCIAL CIGARETTE ROLLING MACHINES
LITTLE ROCK - Attorney General Dustin McDaniel announced today that commercial "roll-your-own" cigarette machines will be prohibited in Arkansas under a new law also aimed at deterring illegal activity by tobacco wholesalers and manufacturers.
Act 836 of 2011, signed into law this week, was part of the Attorney General's legislative package. The Act bans commercial cigarette rolling machines, effective Jan. 1, 2012.
Retail cigarette vendors operate such machines to exploit the tax discrepancies between "roll-your-own" cigarette tobacco, pipe tobacco and cigarettes. Because of the tax differences, the lower costs for "roll-your-own" cigarettes appeal to youth and an already-addicted adult population of smokers.
Without Act 863, the tax discrepancies would hamper the State's long-term public health efforts.
There are no machines currently in Arkansas. McDaniel sought the legislation to ensure that none enter the State.
"Cigarettes from these machines may have a lower cost to smokers because of tax differences, but they carry the same high health risks. We don't want these machines in our state." McDaniel said. "I'm grateful to the General Assembly for also recognizing the potential harm to public health and providing broad, bipartisan support for this Act."
The state's top consumer advocate, McDaniel has made tobacco issues a priority during his tenure as Attorney General. In addition to shepherding this and other legislative efforts on behalf of the state's children and families, McDaniel is co-chairman of the Tobacco Committee of the National Association of Attorneys General.
As Tobacco Committee co-chairman, McDaniel oversees compliance of about $6 billion in annual payments to the states related to the Master Settlement Agreement with tobacco companies.
In addition to its health component, the Act helps to ensure that tobacco wholesalers and manufacturers are paying their fair share of taxes for the products they sell in the state.
Act 836 will help the state fight illegal activity estimated by the U.S. Department of Justice to cost states more than $5 billion annually. The Act allows the state to revoke the Arkansas business licenses of those manufacturers or wholesalers who act unlawfully in other states. Companies which pose an elevated risk of noncompliance with Arkansas law could also be required to post a bond as a condition of doing business here.
Licensed wholesalers must also provide more information about in-state sales to the Attorney General, Department of Finance and Administration and Arkansas Tobacco Control. The information will allow the agencies to target tax avoidance by retailers and consumers.
The Act was sponsored by Reps. John Edwards, D-Little Rock, and Davy Carter, R-Cabot.
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