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Friday, July 6, 2012

Obama Sides With Big Tobacco to Kill Roll-Your-Own Cigarette Stores

July 7, 2012 - Operators of roll-your-own cigarette stores will be forced out of business last night at the stroke of midnight. You can thank President Obama for that, friends. You see, on July 6 he signed a federal transportation bill into law, and tucked quietly within that bill was a section that sided with Big Tobacco companies to drive the competition of small businesses into the ash tray of history. It's all about the definition of what these little businesses are - and the taxes they're required to pay as a result.
A roll-your-own-cigarette operation
Photo: News-Herald.com
"A few paragraphs added to the transportation bill changed the definition of a cigarette manufacturer," reports The Las Vegas Review-Journal, "to cover thousands of roll-your-own operations nationwide. The move, backed by major tobacco companies, is aimed at boosting tax revenues." 

Low-income smokers know all too well that this means the loss of a low-cost alternative to expensive, pre-rolled cigarettes. Add to that the already obscenely high taxes on cigarettes in most cities, counties and states and the average Joe is the one who gets hit the hardest. This will not help the unemployment numbers, either: Consider the thousands of people nationwide - shop owners and the folks who work for them - who will lose their jobs because of this.

This is not the first time that the Obama Administration has attacked roll-your-own tobacco stores.  In late September, 2010, a part of the Treasury Department called the "Alcohol and Tobacco Tax and Trade Bureau" (TTB) ruled that shops with roll-your-own tobacco machines should be legally classified as cigarette manufacturers and would need to get a  permit and adhere to strict government regulations. The News-Herald (Ohio) reported in 2010 that "roll-your-own machines throughout the country are being shut down. One local business was affected when its machines were shut down late last week."

"Since 2009," reports Times Free Press, "when Congress imposed different taxes on ready-made cigarettes than loose tobacco, roll-your-own stores have spread like weeds. The stores allow smokers to buy their own tobacco and rent rolling machines in the stores to make their own smokes, cutting their tax bill and cost of smoking nearly in half."

A provision in the bill that was just signed - and goes into effect at midnight - will finally force the roll-your-own stores to pay the federal "manufacturer" tax that most (if not all) of them have not paid since that September, 2010 reclassification. Most say they cannot afford the tax and it will force them to close.

Big Tobacco wins another one. The little guy and small businesses lose again.