chanel
Silver Member
On Friday, President Barack Obama is expected to sign into law a federal highway bill with a section that redefines tobacco manufacturers to include any business with a roll-your-own cigarette machine and taxes those products at the same rate as packaged smokes.
Since 2009, RYO stores have been selling cigarettes with far lower taxes than packaged cigarettes.
Why? In 2009, Congress more than doubled the federal excise tax on cigarettes, and, to bring RYO tobacco in line with packaged smokes, raised the tax on RYO tobacco from $1.10 a pound to $24.78 a pound. Yet it raised the tax on pipe tobacco by a far smaller amount from $1.10 to $2.83 a pound.
And RYO stores popped up across the country.
Since the 2009 tax increases, Congress Government Accountability Office says RYO tobacco sales have fallen 74 percent while pipe tobacco sales have exploded, jumping from 3.2 million pounds to 30.5 million pounds a year, according to government reports.
The GAO concluded the increase was due to consumers switching to pipe tobacco for their machine rolled cigarettes and not to a sudden jump in pipe smoking.
The GAO found that a carton of RYO cigarettes cost half as much, or even less, than a carton of discount cigarettes at a store because of the lower taxes.
Roll-your-own cigarette stores going up in smoke - Chicago Sun-Times
"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." - Barack Obama