Welcome, Guest! - or
Easy to remember!  »  VinNews.com

Albany, NY - Roll-Your-Own Cigarettes Win State Tax Fight

Published on: June 25, 2012 09:02 AM
By: AP
Change text size Text Size  
Bookmark and Share
Seth Wenig / APSeth Wenig / AP

Albany, NY - A new and savvy player dealing in loose tobacco rolled and packaged in retail stores but taxed far less than cigarettes has beaten New York’s governor and Legislature again as well as an unlikely alliance of cigarette makers and the American Cancer Society.

A bill to tax loose tobacco rolled in stores at the same level as cigarettes passed the Democrat-led Assembly in the regular session that ended Thursday but never made it to the floor of the Republican-led Senate. Customers are supposed to use the large machines the size of a dryer at a self-service laundry to roll their own while at the store, avoiding the taxes manufacturers pay if they rolled the cigarettes.

“It’s impossible for us to know everything that happened, but apparently one company with a $10,000-a-month lobbyist was able to block a bill that would stop tax evasion, prevent residential fires and encourage smokers to quit,” said Russ Sciandra, state director of advocacy for the American Cancer Society.

Advertisement:

State records show that lobbyist was former Republican Sen. Alfonse D’Amato.

D’Amato’s Park Strategies firm was hired by the biggest player, RYO Filling Station — also known as Roll Your Own Machine of Girard, Ohio — at a fee of $10,000 a month. D’Amato met privately with Governor Andrew Cuomo on Feb. 20, according to Cuomo’s public schedule.

The bill to make these roll-your-own cigarettes at stores subject to cigarette taxes died in a Senate committee. But the company is still lobbying because the bill might come up in a special session in November.

“We’re breathing a little easier but by no means is the fight over,” said Bea Gonzalez, spokeswoman for the RYO company.

The Legislature often returns to session in the fall for some bills or, like this year, after the elections to act on bills.

“We had been working diligently with the governor’s office,” she said Friday. “We hired Park early. We have been trying to educate legislators ... they have just been extremely effective.”

A Park Strategies spokeswoman declined to comment.

The state Senate’s Republican majority has opposed the measure as a tax increase. Senate majority spokesman Scott Reif had no immediate comment on this measure.

So far this year, more than two dozen states have introduced bills to restrict the machines by reclassifying the stores as manufacturers or by otherwise increasing tax revenue from the growing industry.

For the Liu family, immigrants from China over a decade ago, their store is their livelihood and they’re about to open another.

“We’re doing a pretty business,” said Renia Liu, who works at her father’s store, Tobacco Roll in Clifton Park, in upstate New York. It opened in February. “Here, customers save like half. And we have returning customers a lot. Business is going well.”

The clean, airy storefront in a small retail mall with a hair and nail salon and a soccer store has two machines to roll cigarettes. Upholstered desk chairs provide customers a place to relax as they await their smokes and watch sports on a big-screen TV.

On the counter sits a thick wad of papers, the second volume for the store, in which customers sign a petition stating: “We are customers, not manufacturers.”

The U.S. Government Accountability Offices traces the trend to the 2009 Children’s Health Insurance Program Reauthorization Act. That federal law increased taxes on traditional cigarettes to combat smoking by young people but left loose tobacco used in at-home rolling devices and pipe tobacco at lower rates.

That prompted the tobacco industry to shift production to lower taxed items, such as loose tobacco for rolling and pipe tobacco. The difference is $20 per pound in federal taxes alone.

The machines can churn out 200 cigarettes in eight minutes as the customer waits, compared to the nearly three hours it takes in small roll-your-own devices used at home.

The customer walks out with a box of 200 cigarettes at a cost of $37.99, compared to a carton that could cost $108 at a gas station across the street or $125 in New York City. The state and city have the nation’s highest cigarette taxes.

“This is a very significant growing subset of the industry,” said David Sutton, senior manager of media affairs at Altria Client Services based in Virginia, parent company for Philip Morris USA. He opposes what he calls mini-factories.

“This is clearly a loophole that’s being exploited,” he said.


More of today's headlines

New Delhi - Indian media say police have arrested a man suspected of being a key local organizer for the Pakistani gunmen who rampaged through India's financial capital... Kuala Lumpar - A Malaysian court ruled Monday that an Iranian man accused of plotting to attack Israeli targets in Bangkok must be extradited to Thailand. Masoud...

 

Total5

Read Comments (5)  —  Post Yours »

1

 Jun 25, 2012 at 12:19 PM PMOinFL Says:

The tyrannical, ultra-liberals of New York LOST in their fight to take away even more money and freedom from the people of the state.

I love this statement:

“It’s impossible for us to know everything that happened, but apparently one company with a $10,000-a-month lobbyist was able to block a bill that would stop tax evasion, prevent residential fires and encourage smokers to quit,”

1. You know everything. You lost.
2. $10,000/month in lobbying fees is NOTHING. The pet food lobby spends over 50 times that!
3. It is not tax evasion. I, as a consumer, have the right to buy tobacco and roll my own using any machine I see fit (my own or rented). You scummy communists in NY set up the cigarette taxes to stick it to the cigarette manufacturers, now you want it both way! NO WAY! Blame the dumb, communist NY legislators and voters!
4. It is not the government's job to use taxation to encourage me to do ANYTHING. If the first lady wants a "just say no to drugs" or a "read to kids to boost literacy" campaign, or a vegetable garden to promote healthy eating, FINE, that is their traditional role, but the Constitution gives NO power to anyone to tax me into changing my behavior!

2

 Jun 25, 2012 at 02:02 PM Avreich1 Says:

Reply to #1  
PMOinFL Says:

The tyrannical, ultra-liberals of New York LOST in their fight to take away even more money and freedom from the people of the state.

I love this statement:

“It’s impossible for us to know everything that happened, but apparently one company with a $10,000-a-month lobbyist was able to block a bill that would stop tax evasion, prevent residential fires and encourage smokers to quit,”

1. You know everything. You lost.
2. $10,000/month in lobbying fees is NOTHING. The pet food lobby spends over 50 times that!
3. It is not tax evasion. I, as a consumer, have the right to buy tobacco and roll my own using any machine I see fit (my own or rented). You scummy communists in NY set up the cigarette taxes to stick it to the cigarette manufacturers, now you want it both way! NO WAY! Blame the dumb, communist NY legislators and voters!
4. It is not the government's job to use taxation to encourage me to do ANYTHING. If the first lady wants a "just say no to drugs" or a "read to kids to boost literacy" campaign, or a vegetable garden to promote healthy eating, FINE, that is their traditional role, but the Constitution gives NO power to anyone to tax me into changing my behavior!

Yes, PMOinFL, those are fine words but you and I both know that governments have been successfully using taxation to influence human behavior, as in the case described in the article, for centuries now.

It may not offer you any comfort in your present state of anger, but may I refer you, please, to 'קהלת, פרק א', פסוק ט?

3

 Jun 25, 2012 at 02:07 PM Phil E Stein Says:

PMOinFL seems to be foaming dangerously at the mouth.

He has told us that "... scummy communists in NY set up the cigarette taxes to stick it to the cigarette manufacturers, now you want it both way". He then continues ranting in similar terms, telling us all to "blame the dumb, communist NY legislators and voters!"

Hmm, such fine language.

Might I remind PMOinFL that he lives in Florida (according to his screen name, at least), so New York domestic legislation will not affect him in the slightest?

4

 Jun 25, 2012 at 03:34 PM PMOinFL Says:

Reply to #3  
Phil E Stein Says:

PMOinFL seems to be foaming dangerously at the mouth.

He has told us that "... scummy communists in NY set up the cigarette taxes to stick it to the cigarette manufacturers, now you want it both way". He then continues ranting in similar terms, telling us all to "blame the dumb, communist NY legislators and voters!"

Hmm, such fine language.

Might I remind PMOinFL that he lives in Florida (according to his screen name, at least), so New York domestic legislation will not affect him in the slightest?

They already tried it here in FL and we shot it down too. Except these things never get the backing of anyone worth anything because we respect individual freedom and liberty in this state.

5

 Jun 25, 2012 at 04:10 PM GreenMetropolis Says:

Reply to #4  
PMOinFL Says:

They already tried it here in FL and we shot it down too. Except these things never get the backing of anyone worth anything because we respect individual freedom and liberty in this state.

So, if "they already tried it here in FL and [you] shot it down too" why are you screaming and hollering so much about something happening in another state entirely?

6

Sign-in to post a comment

Scroll Up
Advertisements:

Sell your scrap gold and broken jewelry and earn hard cash sell gold today!