Roll-your own tobacco shop owners like the expense of broadening the tax

Customer’s tobacco Mizer save the equivalent of $ 30 carton of cigarettes, tobacco free buying and hollow tube, and then rent a car that rolls his cigarettes.

“Each client has its own mix,” said Bob Mizer, owner of the store. “We have eight different types of tobacco here, and they can mix and blend to meet what they want.”

Ready-made cigarettes are cheap because they are not subject to the same state and federal taxes, as well as with companies that are considered producers in accordance with the laws of the State of Arizona.

Mizer said that this setup allows its operation and others like it to compete with the tobacco store Indian reservations, where customers pay less excise taxes.

That’s why Mizer and others roll their own store to say a bill moving the state legislature would be a mortal blow.

HB 2717, authored by Rep. Jim Weiers, R-Phoenix, would be classified as an enterprise with a cigarette in the mills as producers and subject them to the same regulations and taxes are the companies that make finished cigarettes.

House Commerce Committee approved the bill Feb. 15 to 5.3 votes, sending it to the full house in the form of the Rules Committee.

Mizer said the loss of tax benefits would be only part of the problem, if the bill becomes law.

If he had been classified as a producer, he will be obliged to obtain a state license production. However, those seeking a state license must first obtain a federal license to manufacture, and with that comes a ban on selling directly to customers in the area where they produce cigarettes.

Mizer said that they have no choice but to denial of his three rolling machines, which together cost him about $ 100,000. And because his business depends heavily on them, he said that the need to close and put his 13 employees out of work.

“It’s like a Catch-22,” said Mizer. “You say that we are manufacturers, but we can not obtain a license. We’re going out of business if this bill passes.”

This is not the first attempt to classify the retail roll your own car manufacturers. In 2010, the U.S. Department of Treasury Alcohol and tobacco tax and trade bureau issued a decree calling, but a federal court in Ohio granted the injunction in response to a lawsuit RYO Machine Rental LLC, which sells and rents out a roll of their own machines.

Jeffrey Burd, a lawyer representing the Ohio RYO Machine Rental, told lawmakers that he found the time this bill strange, given that a hearing on the suit of his company is scheduled for April.

Machines used a roll your own tobacco shops are not comparable with the machines used in major cigarette manufacturers, Burd, adding that it would take tobacco stores 16 hours of the camp to as many cigarettes as the car manufacturer is in a minute.

“It’s just a situation where the cigarette manufacturers would like to take comfort from the” add your own “clients, because they prefer that their product was purchased,” said Byrd.

John Mangum, a lawyer representing Altria Group, formerly known as Philip Morris Company Inc, which manufactures cigarettes under brands including Marlboro, told the committee that without the law customers migrate to stores such as in the Mizer. This would reduce the revenue of $ 1.01 per pack federal tax producers and $ 2 for the tax status of the package manufacturer, he said.

Parts and taxes will be spent on anti-smoking programs.

“It is not clear tax advantages”, Mangum said. “What we’re trying to do is to restore what we would call a level playing field.”

Byrd said the machine shop of tobacco does not cause people to roll their own cigarettes, but this is only for the convenience of people who have been rolling their own cigarettes for less efficient cars at home.

“There is no tax loophole,” he said.

Groups joining Altria Group in support of the signing of the bill include Reynolds American Inc, Arizona retail cigar associations and associations of America.

Groups joining RYO rental Car Company and owners of shops, including Mizer, in opposing the bill included Goldwater Institute, an independent watchdog group that promotes limited government and free enterprise.

In voting for the bill, Weiers said the issue boils down to making sure that no business has an unfair advantage when it comes to taxes.

“This is a very touchy issue with me because it goes to the very nerve that I believe that when it comes to taxes and how stupid people are” Weiers said.

Reps. Rick Gray, R-Sun City, Bob Robson, R-Chandler, and JD Mesnard, R-Chandler, voted against the bill.

“If I go out and rent all the equipment necessary to do landscaping, it makes me landscaper? All this really makes sense,” said Robson.


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