Cigarette tax purposes in Washington

The proposed state tax on roll your own cigarettes can put dozens of small tobacco retailers out of business.

Roll-your own tobacco retailers in Washington to avoid high taxes on cigarettes, because, by definition, they do not produce cigarettes for sale. Customers buy tobacco and paper tubes, and then throw cigarettes on their own, using a machine on site. With this method, 200 self-rolled smokes - the same number in a standard box - sell for about $ 34. This is less than half the cost of packed cartons of cigarettes.

This DIY approach offers a cheaper alternative for smokers. However, tobacco companies and shops say that a tax loophole creates an unfair advantage in the market. Roll-your own retail even have their own language for legal reasons, referring to the finished product as a “smoke” instead of cigarettes, and avoid terms such as boxes and packaging.

In Washington, packaged cigarettes cost about $ 7.50 per pack, although some stores mark prices up more than $ 9. Excise tax in Washington is $ 3.025 per pack, or 15 cents per cigarette, which ranks fifth among all states. Excise tax in New York at $ 4.35 per pack of cigarettes is the highest, and in New York, an additional $ 1.50 tax-free. Virginia has the lowest excise tax of 30 cents per pack.

House Bill 2565 calls for the use of the same taxes, roll your own smokes in Washington. The bill revises the owners of mills, as producers, and include a roll your own smokes a cigarette within the definition. With the support of state Rep. Steve Kirby (D-Tacoma), the bill passed the House during the regular session, but stopped in the Senate. Governor Christine Gregorian announced last month that the tax is still “on the table” for the current budget debates in the legislature. If approved, the new tax could come into force on July 1.

The number of state taxes lost to roll your own products can be $ 26 million a year, according to a draft report. Convenience stores and tobacco manufacturers support the proposed tax as a way to level the playing field. Opponents say the bill will be closed 65 stores in Washington, tobacco, and cost the state 250 jobs. One of these stores tobacco plant, which opened in October 2011 on the Pacific Highway and South Three hundred and forty-eighth Street in Federal Way. Shop owners, Donald and Sandy City, said that the new tax would add about $ 23 for each lot of 200 self-rolled smokes - and is likely to lead to closure of business.

Shop owners have already paid tax on wholesale tobacco. In addition, they say that their tobacco contains fewer harmful chemicals and exciting than finding commercially manufactured cigarettes. The proposed bill states also refers to concerns about the relationship between the roll your own smokes and access to tobacco to minors. Don City refutes this view. Most of his customers are smokers aged 45 and older who want to save money, he said, and some customers come from as far away as Lake Bonney.”It’s not creating any new smokers,” said Urban, a resident of the way that the federal lobbying in Olympia on behalf of a roll your own tobacco retailers. “It was for many years.”

The issue of tax rolls your own tobacco retailers is nothing new at the federal level. Last month the U.S. Senate passed a bill highway appropriation amendment to the tax roll your own retailers as well as commercial producers. According to the Washington State Department of revenue, taxes on cigarettes to go to the state general fund and education legacy trust account - nearly $ 400 million total in 2009. House Bill 2565 states that any new revenues from the proposed tax will be credited to the prevention of tobacco use among young people.

On a related note, the Indian tribes in Washington to collect their tribal sales tax on cigarettes. At the time it takes to charge state taxes, non-Indian customers, the tribes themselves are exempt from state taxes cigarettes. In one agreement, Puyallup Indian tribe pays 30 percent of tribal revenue on all sales of cigarettes in the state.

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