When is a cigarette not a cigarette? When you roll your own. That's apparently the case in shops that sell tobacco and paper and let customers use roll-it-yourself machines. Those shopkeepers aren't required to collect cigarette taxes. Legislators ought to snuff out this peculiar anachronism.
In previous times, crude roll-your-own cigarettes often bore little resemblance to the professionally manufactured kind, but technology has changed that. These days, in more than a dozen shops statewide, customers may pay about $40 for loose tobacco, paper tubes and the use of a rolling machine. Press a button or two, and about 10 minutes later there's the equivalent of a carton of cigarettes, at less than half the retail rate.
The state can't collect the $34.20 tax normally applied to a carton of cigarettes. And according to a February Superior Court ruling, the tobacco shops aren't cigarette manufacturers, as long as they simply tell customers how to use the machines and don't operate them. That means they don't need a special manufacturing license. The net result is a loss to state coffers of about $1 million annually.
That's nonsense. These shops clearly are involved in the manufacture of cigarettes, and ought to pay for that privilege. Likewise, customers should pay the cigarette tax.
Last week, the Finance, Revenue and Bonding Committee added language to a tax bill requiring roll-your-own shops to obtain cigarette manufacturer licenses and to charge customers the same tax they would pay for commercial smokes. Republicans on the committee voted against the measure, calling it a new tax.
They're right about that. It is a new tax — one that should have been collected all along. The legislature would be wise to close this needless and costly loophole.