You are here
WASHINGTON, D.C. – The U.S. Treasury's Alcohol and Tobacco Tax and Trade Bureau ruled last week that retailers selling cartons of cigarettes produced by rolling machines in stores must obtain manufacturing permits and pay applicable federal taxes, the Wall Street Journal reported.
"We do not believe that Congress intended for a consumer to be able to purchase at retail commercially manufactured cigarettes upon which tax has not been appropriately paid," the bureau said in its ruling, which was cited by the Wall Street Journal.
The ruling deals a blow to tobacco stores that sell deeply discounted cigarettes, and addresses a practice where some stores have sold "roll-your-own" cigarettes for as little as $16 a carton, according to the report.
Approximately 150 tobacco outlets in some 20 states have engaged in the activity, using high-speed rolling machines that yield a carton of cigarettes in eight minutes, according to an estimate by one maker of the devices cited by the newspaper.
Cigarette manufacturers must obtain permits from the bureau, comply with recordkeeping rules and pay $10.07 in federal excise taxes for each carton of cigarettes made, according to the report, which noted the ruling suggests that many retailers may find it cost-prohibitive to own or lease such machines.
RYO Machine Rental LLC, an Ohio manufacturer that has sold or leased about 200 of the machines to retailers, didn't respond to requests for comment by the newspaper.