Letters to the Editor

Your views in 200 words or less

CIGARETTES: Roll your own hurts retailers and state

Letter by T.K. Bentler, Olympia on March 23, 2012 at 9:42 am with 14 Comments »
March 23, 2012 12:39 pm

Roll your own (RYO) cigarette retailers have been opening at an alarming rate throughout the state of Washington. These stores advertise cheap smokes but end up costing average mom-and-pop retailers, grocery stores and the state a lot of money. This is why a large coalition of retailers are supporting House Bill 2565.

HB 2565 defines a finished roll your own (RYO) cigarette as a “cigarette,” which is subject to the same excise tax levied on these products in average convenience and grocery stores. The tobacco used in RYO machines is loose-leaf cigarette tobacco, which has been mislabeled as pipe tobacco to take advantage of a gaping loophole in the application of federal excise taxes.

The RYO phenomenon started in 2009, right after Congress passed the State Children’s Health Insurance Program. To fund the program, the feds increased all tobacco taxes. Pipe tobacco taxes were increased, but at a much lower rate than cigarettes or loose-leaf cigarette tobacco.

Pipe tobacco purchases have increased from 3.17 million pounds in 2008 to 33.8 million pounds in 2011. This is how the RYO retailers have been evading the high tax rates. Mom-and-pop retailers and larger grocery stores are losing sales to these RYO stores, and the state is losing anywhere from $12 million to $20 million a year.

The RYO stores are based on tax evasion and deception; 2SHB 2565 aims to remedy that deception.

(Bentler is executive director of the Washington State Association of Neighborhood Stores.)

Leave a comment Comments → 14
  1. pantomancer says:


  2. subcaller says:

    And, if I raise and butcher my own beef, I should be required to pay the local market for the meat anyway.

  3. Frankenchrist says:

    I grow my own tomatos. Do I owe Safeway some money?

  4. concernedtacoma7 says:

    Two terrible analogies.

  5. The tobacco in RYO cigarettes is less bad for you than the pre-rolled addiction delivery systems that have been perfected (with the addition of various non-tobacco substances).

    The “logic” of this letter is absurd. Retailers still can make profits from selling loose leaf tobacco. Passing a law to protect one form of tobacco over another seems more than a little bizarre.

  6. huffington says:

    Beerboy, although I agree this letter is somewhat absurd, a valid point is made that currently one form of tobacco is taxed at a higher rate than another. The letter writer seeks to end this protection and make their tax rates equal. I don’t have any studies, but if loose leaf tobacco is found to have the same health negatives as mainstream cigarettes, then maybe we should tax them at the same rate.

  7. Just what we need! More government involvement in small business. If the state wasn’t so greedy in trying to squeeze every penny from tobacco users, they wouldn’t see people going to other sources to get their cigarettes. I for one am a smoker and I don’t give the state a penny in taxes. Remember the prohibition on alcohol? They never learn do they?

  8. How many of these stores are there in Tacoma? Only 1 I know about. Very alarming!
    So a small amount of people are going to these places and buying less harmful smokes and saving about $250 a month. What is better for the economy? The state getting a very small amount of money from the people that do use these machines or those people having $250 more dollars to pay rent, buy goods at other shops, pay off debt? Raising the taxes will just put the people out of business, more empty storefronts, more people out of work and more money to big tobacco.

  9. SmokesForLess says:

    I would offer to the readers of this blog something to consider when reviewing Mr. Bentler’s Letter to the Editor. First and foremost Mr. Bentler does not offer any facts regarding the growth of the RYO business or facts regarding the decline in the number of cartons sold from the businesses that he represents. In addition, Mr. Bentler demonstrates his lack of understanding of the profile of the customers that use an automated device to roll their own smokes. When Mr. Bentler does use revenue estimates, he is not using the latest revenue impact as provided by the Washington State Department of Revenue.
    The increase of Pipe Tobacco volume represents a substantial increase in revenue on a product that has a 95% Federal Excise Tax. Also Mr. Bentler failed to recognize the substantial growing tax revenue on the rental fees of the automated rolling devices. This tax did not exist before, in other words it is a new stream of tax revenue with the introduction of the RYO machines. There are other states that have studied the impact of RYO businesses, such as Tennessee and concluded that taxing the RYO businesses out of business, does not create a gain for the state.
    The profile of someone that uses the RYO machines are people that cannot afford national brand cigarettes, period. The growth in RYO business comes from people who were buying cigarettes online, buying them on a reservation, rolling their own and driving across state borders to purchase their cigarettes. The relationship between people using the RYO machines and any change in the purchases of national brands from small businesses is not linked. This is a power play on the part of big tobacco to snuff out any competition to what they believe should be their monopoly.
    If one gathers all the facts, the only conclusion that can be made is that increasing taxes on RYO smokes will be a loss of tax revenue on the rental fee on the machine, 65 small businesses will immediately close and approximately 250 people will turn to Washington State unemployment compensation. If one compares this outcome, to that of big tobacco winning, cutting another notch in their gun pointed at competition, we all have to wonder what country we are living in.

  10. sumyungboi says:

    So, what the letter writer is advocating is a state law to protect a private/public racket, in essence, begging for crony socialism. And I just love how the state is “losing money” because of RYO stores. Awesome how, when someone or some business figures out a legal way to not bend over for the taxman, the state is losing money. If there were ever a poor tax, it’s cigarettes, and the letter writer is lamenting that the state is “losing” up to 20m a year. Pretty pathetic.

  11. If people stopped sucking on those filthy, obnoxious things they wouldnt have to worry about it would they?

  12. sumyungboi says:

    dcr, you’ve exemplified what’s really hilarious about this letter. The smokers who visit these RYO things aren’t whining or worrying about anything, quite the opposite, in fact. The letter writer is whining that poor people should be funding the government to a greater extent than they do now. It’s not a coincidence that the one item that’s taxed in such a lopsided and ridiculous manner are also the most addicting legal thing that people can partake. We all know that cigarettes cause early death and ruin lives, and it’s the one thing that will _never_ be banned, ever. The up close and personal attack on smokers that began a couple of decades ago was a simple way to marginalize a group of people for the reason of taxing them into oblivion without any sympathy from society as a whole. Smokers are about 15% of the population, and taxes at all levels is about 60%, meaning that if the average smoker does about a pack a day, the various governments rake in about $200,000,000.00 each day, mostly off of the backs of the poor.

  13. Dcr, I’m not complaining about you “sucking on those filthy,obnoxious things” that you may have a fondness for, so leave smokers alone, ok?

  14. standingup says:

    Just for the record, the letter writer is a lobbyist representing the Korean Small Business Association as well as 7-11 and other convenience stores.
    These stores carry hundreds of items on their shelves and cigarettes are a small portion of what they sell. If these RYO stores cost them 3 or 4 packs of cigarettes a day, I don’t think this will put them out of business. The are just upset they didn’t get one of these machines first!
    The RYO shops sell tubes, tobacco, rent their rolling machine and most carry cases, lighters, ash trays and things “smoke” related…
    They do not carry beef jerky, beer, gasoline, pop, candy, potato chips, and on and on and on like convenience stores.
    Oh, and the RYO shops are Mom and Pop shops too..
    Bottom line, should the State side with Big Tobacco (because that is who they are really siding with and who is providing $$$ for their re-election campaigns) or should the State support small business???
    It’s not their job to pick winners and losers in the private sector.

We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part and abiding by these simple rules.

JavaScript is required to post comments.

Follow the comments on this post with RSS 2.0