It’s Big Tobacco’s attempt to blow away competition from Little Tobacco.
That’s how Jean Wood and 64 other roll-your-own cigarette retailers throughout the state interpret a proposed bill in Olympia they say targets their livelihoods.
Tobacco shops simply want large corporations to butt out of their right to earn a living.
“It’s not fair,” said Wood, owner of Butt’s Tobacco shops in Auburn and Edgewood. “I’m not going to go down without a fight.”
Wood and other “smokes” shop operators fear the possibility of new state regulations that they say would dramatically hike taxes on loose tobacco and ultimately put them out of business. House Bill 2565 classifies Washington retailers who own roll-your-own (RYO) machines as “cigarette manufacturers,” subjecting them to stricter tax regulations and requirements.
Tobacco shops have taken RYO to another level, and some states, Washington among them, are cracking down.
A growing number of smoke shops is equipped with heavy machines that can roll a carton’s worth – 200 cigarettes – in a matter of minutes. The stores allow customers to use machines that roll loose tobacco into cigarettes that are then sold by the carton.
Smokers looking for lower prices can find them at these retailers, where customers can pay anywhere from $21 to $35, a deal that includes tobacco, tubes and a small fee to use the machine, or about half the cost of a regular carton.
Customers can avoid high cigarette taxes by using pipe tobacco, which is taxed at lower rates.
State lawmakers question whether this tobacco should be taxed at higher, cigarette-like rates.
Officials with Big Tobacco companies and public health care advocates say they are trying to crack down on ultra cheap and unregulated cigarettes, which they contend skirt tax and health laws.
But Wood is trying to offer a bargain destination for smokers. Taxing the tobacco would only hurt business, forcing RYO shop operators to pay more for the tobacco it buys, she said.
It could force shops out of business, which in the end would fail to generate additional tax revenue for the state, Wood said.
“I already pay my fair share of taxes,” she said. “But they want more. They don’t want to negotiate. They don’t want to hear it. They want us gone.”
Customers who use the RYO machines pay all applicable taxes on the loose tobacco and rolling tubes inserted into the machines, the Roll-My-Own Coalition of Washington claims.
The coalition says state retailers generate more than $1 million in sales tax and $1 million in state excise taxes annually.
The state House approved the bill on March 6. The state Senate must take action in its special session before the bill is forwarded to Gov. Chris Gregoire for her signature.
The bill would extend the tax on cigarettes – currently 15 cents per cigarette – to RYO cigarettes sold in stores.
Wood and others are waiting anxiously for the outcome. The new law threatens to undermine 65 stores employing 250 people across the state, she said.
“A lot of our customers don’t want us to leave,” she said. “If they close us down, they will go out of state or roll their own privately.”
Small convenience stores in the state are watching, too. They claim smokes shops divert business. A new law would support them, bringing RYO prices to a level playing field with traditional cigarettes.
