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State targets do-it-yourself tobacco shops for taxes
Dawn Day, a store clerk at DIY Tobacco in Bremerton, said they call their product “smokes” instead of cigarettes to make the distinction between machine-rolled tobacco and manufactured cigarettes like Marlboro or Camel. Customers buy loose tobacco and rolling papers then rent time on a machine which can make up to 200 cigarettes in eight minutes.
A carton of smokes costs about $32 while a carton of manufactured cigarettes at a retail location costs about $80.
Karen Keiser, 33rd District senator, introduced Senate Bill 6564 Jan. 30 which seeks to make roll-your-own machines illegal in the state of Washington. Roll-your-own tobacco supporters argued that the bill, which is sponsored by Philip Morris tobacco, is a way to squash small business competition.
The bill replaced House Bill 2565 which was heard before the Senate and House Jan. 23 and 24 and targeted only the so-called “tax loophole” that sponsors argued these small shops were exploiting. Shops like DIY do not pay a state or federal cigarette tax, which is $30 per carton for Washington state. Instead, they pay a lesser tobacco products tax.
“It will close us down,” Cassie Kroesser, owner of DIY Tobacco, said. “Quite simply, I will have to file for bankruptcy if this bill passes.”
Christine Rolfes, 23rd District senator who sponsored the original bill, categorized tobacco shops as “unregulated cigarette manufacturers” who were making cigarettes more easily available to the public, particularly underage smokers.
Rolfes has pulled out of the new bill, and Keiser has become the prime sponsor.
“The intent of the bill is not to put people out of business,” Rolfes said. “It is to level the playing field. The business model is new but the public health field has a concern that the model will proliferate if left unregulated. They don’t comply with fire safety rules or public health rules.”
Rolfes said that there are two issues concerning roll-your-own cigarettes and public health and safety. The first is that the cigarettes are not behind a counter or locked behind glass. Rolfes and 36th District Sen. Jeanne Kohl-Welles believe that the model may give underage smokers access to cigarettes that they would not have at convenience or grocery stores.
Day argued that most of her customers are more than 35 years old and include “a lot of elderly people with limited mobility.” It’s simply not a “teenager thing” to want to wait for rolled cigarettes.
Day also explained that the shop checks ID of all of their patrons for legal age. To use the machine, a customer has to show their ID, buy the bag of tobacco at the counter and pay the rental fee for the rolling machine to operate. Though kids are allowed in the stores, Day claimed that they cannot operate machines without her knowledge.
Scott Daniels, Kitsap Public Health District deputy director, said that “anything that encourages or promotes the use of tobacco is not something we support.” However, there has been no guidance from the board on this legislation and whether or not cigarette rolling machines pose a public health risk.
“I would prefer that you would not even allow these machines in our state,” said Mary Selecky, secretary of health for the Washington state Department of Health. “But if they are in the state they should be under the same rules for anyone selling tobacco product.”
The Washington Fire Chief’s Association supported the bill at the House hearing Jan. 24 on the grounds that roll-your-own cigarettes are not required to use fire-safe paper such as manufactured cigarettes. Fire safe paper ensures that cigarette burns out if left unattended, said Dylan Doty, spokesman for the association.
“Cigarettes are the leading cause of house fires across the nation,” Doty said. “By making these folks manufacturers, they then would have to comply with the same rules and regulations for safety.”
Eugene Hall, a smoker and regular customer at DIY, said that the real issue is not about public health but business competition.
“No one’s saying smoking’s good for you, but I’ve been using her shop since she first opened and it’s a good product that’s 100 percent natural without all the chemicals and fillers. It’s more flavorful,” Hall said. “It’s just the big names are scared of the competition.”
The Korean Grocer’s Association recently filed a complaint two months ago with the Washington Liquor Control Board that tobacco shops with roll-your-own machines had made their “sales drop dramatically” and that the tax loophole was unfair to businesses who have to pay the cigarette tax, said TK Bentler, spokesman for the Washington Association of Neighborhood Stores.
Roll-your-own shops in the state have grown from 53 stores to 65 stores since the grocer’s association filed their complaint.
The bill prohibiting roll-your-own tobacco machines was introduced for a first reading in the senate Jan. 31 and awaits a senate floor vote.