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CIGARETTES: Most retailers favor RYO taxes

Letter by Jan Teague, Olympia on April 5, 2012 at 9:07 am with 8 Comments »
April 5, 2012 10:12 am

The headline on an April 2 article regarding “roll-your-own” (RYO) tobacco shops says, “Roll-your-own smokes tax has retailers fuming.”

Retailers we collectively represent are not “fuming” about the current proposal before the Legislature. We support it. The only “retailers” not supporting it are the outlets for cheap cigarettes that have taken advantage of a tax loophole.

Legitimate retailers such as grocery stores, convenience stores and gas stations currently sell cigarettes with tax stamps and collect the proper state and federal taxes. For many convenience stores, cigarette sales can be upwards of 30 percent of their total annual revenue.

While these stores are losing sales to RYO locations, Washington state is also losing valuable revenue. According to official fiscal notes, the estimated revenue loss to the state ranges from $12 million to $20 million per year based on 65 RYO locations currently operating in the state.

When the federal government raised tobacco taxes in 2009, tobacco companies began producing loose-leaf cigarette tobacco and mislabeled their product as “pipe tobacco” in order to avoid the higher federal tax. Companies like RYO Filling Station sprung up to take advantage of this 10-to-1 tax differential

We encourage the Legislature to pass 2SB 2565, creating a level playing field for legitimate retailers and providing the state with much-needed revenue.

(Teague is the president and CEO of the Washington Retail Association. Also signing the letter are Jeannie Lee, executive director of the Korean-American Grocers of Washington, and Joe Gilliam, president of the Northwest Grocery Association.)

Leave a comment Comments → 8
  1. Frankenchrist says:

    Big Tobacco and their GOP lapdogs love the RYO tax. They will use the proceeds to fund the Republican War on Women.

    “Mittens” Romney, the Etch-a-Sketch candidate, is a liberal and a flip-flopper. He is doomed to a crushing defeat by President Obama in November.

    Would you vote for a guy who puts his dog on the top of his car for a trip to Canada? Neither would I.

  2. slugoxyz says:

    I would. But then, I’d do it just because you figured on bullying me into either not voting or voting for your “guy”. Using terms like “the Republican War on Women” is as silly (actually stupid) as me calling a ProChoice person a “baby killer”. Why do “you” people always resort to name calling? Is it because you’re not smart enough to post actual facts. Really? The dog on the roof thing? Uhhh 25 years ago… What was your guy doing in 1987 besides smoking a lot of dope? But more important…who cares? What can they do for me right now? No matter who wins, they will spend the next 4 years paying back special interest groups. Whatever…

  3. Theefrinker says:

    This letter is missing the bigger point: taxes are too high on cigarettes as it is. I’m waiting for someone to find a “bottle your own liquor” loophole. If the wealthy can get away with tax loopholes, why can’t the little guy find one to afford a habitual indulgence?

  4. “bottle your own liquor” loophole.

    Highly unlikely – The ATF is still very aggressive in going after bootleggers. There are some boutique distilleries that are opening up – and the opening of the Anchor microbrewery was seen as the start of the decriminalization of beer so, perhaps, like home brewing, Home distilling will become legal – but liquor taxes are too big of a revenue stream for the government (Left or Right leaning) to give up.

  5. sumyungboi says:

    Instead of advocating for more crony socialism, people like the letter writer should be asking why, in the first place, are some goods and services taxed more than others. It doesn’t matter how socially acceptable or unacceptable something is, if it’s legal, it’s immoral for any layer of government to then tax it at a higher rate because it’s a sin, or some such nonsense.

    Letter writer: “Legitimate retailers such as grocery stores.. ”

    If the ryo stores are illegitimate, I would suggest that the letter writer go file a complaint to have them shut down. But if they’re perfectly legitimate and legal, then he ought to quit using the nonsensical rhetoric. Also, I wonder if he takes advantage of any tax “loopholes” or writes off anything on his own taxes, or has ever embellished his own return for that matter.

    Exorbitant taxes on cigarettes are nothing short of funding government on the backs of the poor, and it’s despicable. The ryo tax would be like the government charging people when they splash around in a stream somewhere at the same rate as a day at Wild Waves.

  6. The tax on tobacco serves two purposes. It offsets the cost to taxpayers that are related to the health issues caused by smoking tobacco. It discourages the use of tobacco, thereby reducing tobacco related costs that are ultimately passed down to the taxpayer. The treatment of tobacco related health issues has a major effect on the costs to Medicare (for example). It’s only fair that smokers be taxed in proportion to the financial burden they impose on our society.

  7. sumyungboi says:

    All old people “impose” a financial burden on society. Unless you’re very lucky, you’re not going to die at age 95 by falling off of a cliff while in perfect health. Virtually everyone has end of life health problems that need constant attention. Smokers volunteer to die twenty or thirty years ahead of schedule, and dead people don’t need medical attention.

    All red herrings aside, though, smoking is legal. The tobacco industry is a legal industry. It’s simply not the role of the government to discourage or encourage any activity through punitive taxation or subsidies, and doing so is simply social engineering by people who think they’re smarter than you and I, and crony socialism, which is, in essence, a legal protection racket.

  8. Keepingourrights says:

    This isn’t just smokers that should be worried. All of us should be.Who do our elected officials think they are to decide what a “sin” tax is?Isn’t determining what a “sin” is the role of the church?If that’s the case government does not get to decide what a “sin” tax is?Due to separation of church and state.These elected officials are stripping away Americans rights and I for one want to know which elected officials voted yes on this? They found an easy way out of balancing the budget.This isn’t a tax on business. It’s a tax on people.It always is, and in this case, a minority of people. Shameful.

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