By Maida Suljevic
WNPA Olympia News Bureau
Certain legislators are huffing and puffing about a bill, currently matriculating through the Legislature that would regulate and enforce taxes on roll-your-own cigarette retailers.
Rep. Ross Hunter (D – 48th District, Bellevue) proposed the second substitute to House Bill 2565 that was recommended out of the Ways and Means Committee on Monday with a 19-8 vote.
The measure that passed out of committee requires roll-your-own cigarette retailers to become certified and pay an annual certification fee of $100. Retailers also must purchase tax stamps to enforce the collection of taxes on tobacco products. The stamps would be affixed to containers of roll-your-own cigarettes and the bill requires customers to carry their cigarettes in those containers.
The substitute bill also stipulates that retailers can only sell tobacco products that comply with the certification requirements under the master settlement agreement between the state and tobacco companies, and roll-your-own machines must be equipped with metering devices to count the number of cigarettes made.
The master settlement agreement was established in 1998. Tobacco companies in the United States reached an agreement with 46 states, including Washington, in which the states give up their claims that the companies violated consumer protection and antitrust laws. In return, the tobacco companies would pay the states to compensate taxpayer money that is used to care for patients with smoking related diseases.
Washington State receives $4.5 billion spread over 25 years in compensation money.
The agreement also created new limitations on big tobacco, including the prohibition of advertising to minors as well as advertising and marketing restrictions. It also helps fund anti-tobacco education.
Customers who use roll-your-own machines typically purchase tobacco from the retailer. The tax rate on tobacco in Washington is currently 95 percent of the taxable sales price, while the tax rate for a carton of cigarettes is $30.25, nearly one-third the total cost. A carton includes 200 cigarettes. Customers who choose to roll their own cigarettes pay nearly half for their tobacco than those who purchase cigarettes.
The legislation would ultimately require roll-your-own customers to pay more.
Representative Bill Hinkle (R – 13th District, Cle Elum) is a staunch opponent of the measure. “I want to kill the bill,” said Hinkle. “It’s bad legislation.”
Hinkle believes that Democrats are attempting to make money and as a result would force roll-your-own cigarette stores out of business.
“It’s a classic example of Olympia picking winners and losers,” said Hinkle.
Officials at the Washington State Department of Health believe the bill addresses a public health issue.
“One of the ways that you prevent cigarette smoking is to charge higher tax on cigarettes,” said Tim Church, director of communications at the department of health. Church believes that roll-your-own cigarettes should be taxed as well.
“In general, our feeling is a cigarette is a cigarette is a cigarette,” he said. “Whatever you call it, it’s gonna kill you.”
Officials at the attorney general’s office had concerns with the mechanics of the original bill. According to Robert Fallis, assistant attorney general, the original measure didn’t ensure that the requirements of the master settlement agreement would be met. However, Hunter’s substitute bill is more in line with the agreement.
Officials at the attorney general’s office don’t have an opinion on whether roll-your-own machines should exist, but they are concerned with how the Legislature decides to deal with the issue, said Fallis.
