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TN may boost tax on 'roll-your-own' cigarettes 

Dozens of Tennessee tobacco shops have taken advantage of a tax loophole that allows them to sell roll-your-own cigarettes at a deep discount, but those days may be drawing to a close.

Tennessee lawmakers this week passed a bill that would require roll-your-own retailers to pay a licensing fee and a cigarette tax on each carton they sell.

And proposals in Congress, including one sponsored by U.S. Rep. Diane Black, R-Gallatin, would stymie the growth of roll-your-own machines by designating the smoke shops that house them as manufacturers.

The loophole has cost Tennessee almost $4 million in lost tax revenue since 2009, according to a report released by the Centers for Disease Control and Prevention.

Jason Wells, manager of the Cigar Parlor and Roll Smokes and Go in Hendersonville, says state and federal legislation could shut down his business and hurt the recession-weary customers who benefit from the lower prices of the roll-your-own smokes he and others sell.

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Governor vetoes tobacco tax bills  

Alabama governor vetoes bills that would have used tobacco tax in 3 counties for grant program  

The bills' sponsors say the money will go to worthy charities, senior centers and local schools. However Randolph county political party officials from both sides of the aisle accuse Sen. Gerald Dial and Rep. Richard Laird of wanting to create a fund over which they would have unregulated control.

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PM not ruling out increase in tax on tobacco products 

Roll-your-own cigarette bill headed to governor  

UNCIANO: The power to tax is not the power to destroy 

Legislature Expands Cigarette Tax to Include ‘Roll-Your-Own’ Sellers 

• Relabeling Roll-Your-Own Tobacco as Pipe Tobacco Costing Feds, States $1.3 Billion in Lost Revenues  

Tobacco manufacturers that re-label roll-your-own cigarette tobacco as pipe tobacco are cheating federal and state authorities out of an estimated $1.3 billion in lost state and federal tax revenues, according to a report released Wednesday by the Centers for Disease Control and Prevention.

Last month, the Government Accountability Office found that cases of roll-your-own tobacco were being sold in packages labeled as pipe tobacco. The federal excise tax on loose tobacco used for roll-your-own cigarettes is $22 per pound higher than the excise tax on pipe tobacco.

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New York lost $16.9 million from tobacco tax loophole 

New York lost an estimated $16.9 million in potential tobacco tax revenue during the first 28 months following a federal excise tax increase on cigarettes, small cigars and roll-your-own tobacco.

That's the finding of a new report released Wednesday by the Centers for Disease Control and Prevention, which said states collectively lost $374 million in tobacco revenue from April 2009 to August 2011 because of a market shift to lower-priced pipe tobacco to make roll-your-own cigarettes.

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$31 million in unintended consequences 

• Fiscal and Policy Implications of Selling Pipe Tobacco for Roll-Your-Own Cigarettes in the United States 

Conclusions

Marketing pipe tobacco as “dual purpose" and selling it for RYO use provides an opportunity to avoid paying higher cigarette prices. This blunts the public health impact excise tax increases would otherwise have on reducing tobacco use through higher prices. Selling pipe tobacco for RYO use decreases state and Federal revenue and also avoids regulations on flavored tobacco, banned descriptors, prohibitions on shipping, and reporting requirements.

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• Smokers dodge cigarette tax by switching to pipes, cigars  

Sales of pipe tobacco and large cigars, both taxed at a lower rate, have soared as smokers have adjusted their buying habits to the new price structure.

The shift cost the federal government $615 million to $1.1 billion in uncollected tax revenue from April 2009 to September 2011, the report said. It did not estimate how much individual states may have lost in uncollected taxes.

"That's real money and a tax avoidance scheme Congress ought to be interested in stopping," said Gregg Haifley, associate director of federal relations at the American Cancer Society's Cancer Action Network. "It's also counterproductive for the public health benefit of tobacco taxes."

Monthly sales of pipe tobacco increased from about 240,000 pounds in January 2009 to more than 3 million pounds in September 2011, the Government Accountability Office found. Monthly sales of large cigars more than doubled, from 411 million pounds to more than 1 billion pounds.

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Smokers adjust puffs as prices continue to change  

• New Senators Respond to New Data on Tobacco Tax Loophole 

Senators Dick Durbin (D-IL), Tom Harkin (D-IA), Frank Lautenberg (D-NJ) and Richard Blumenthal (D-CT) expressed concern about the findings of a study released by the Centers for Disease Control and Prevention (CDC) revealing more than $1.3 billion in lost state and federal revenue by tobacco manufacturers relabeling roll-your-own tobacco as pipe tobacco.

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Tobacco tax: Florida missed $63 million in tobacco tax revenues