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Toledo
Blade...
Local machine
rolls 200 cigarettes in 8 minutes
The empty cigarette casings loaded into the front of the RYO Filling
Station at Tobacco Haven moved through the machine like a tiny assembly
line on Wednesday.
Mild tobacco was siphoned from a bin on top of the ATM-like machine and
stuffed into the white tubes, which rotated on a cylinder resembling a
miniature Gatling gun.
In a matter of eight minutes, 200 cigarettes were produced and packed
into a see-through plastic bag.
The roll-your-own machine -- a cause of concern for federal and state
legislators because it falls into a tax loophole -- is a boon for Sam
Markho, who owns Tobacco Haven on Spring Valley Drive in Holland. Mr.
Markho said the technology is so promising that he plans to operate up
to eight shops in the Toledo area. “It produces the same product as a
name brand but saves the customer money,” said Mr. Markho, who also has
stores in Maumee and Oregon.
A box of “smokes” at the store retails for $21.99, which is as much as
$40 less than a carton of cigarettes at a retail store. The business
calls the cigarettes “smokes” to comply with the law, Mr. Markho said.
Smoking is not allowed inside the store, and employees check IDs to
make sure customers are old enough to buy tobacco.
The store offers a choice of tobacco brands and flavors, as well as a
variety of cigarette tubes. Although customers can leave the store with
as many “smokes” as they want, they’re essentially buying tax-free
cigarettes. The loose tobacco leaf used for roll-your-own cigarettes is
considered produce and thus not subject to federal taxes. They also do
not incur Ohio’s cigarette tax.
Two pieces of legislation working their way through Congress aim to add
these machine-made cigarettes to a list of federal taxable tobacco
products and capture the revenues associated with them.
Rep. Diane Black (R., Tenn.) is sponsoring an amendment to the federal
tax code that would expand it to include “any person who for commercial
purposes makes available for consumer use a machine capable of
producing tobacco products.” The bill was referred to the House
Committee on Ways and Means on March 5.
The other piece of legislation would amend the Secure Rural Schools and
Community Self-Determination Act with similar language. It is sponsored
by Sen. Max Baucus (D., Mont.) and was passed by the Senate on March 8.
At least some of the country’s biggest tobacco companies are lobbying
for the legislation, including Altria Group Inc., which is the parent
company of Philip Morris USA, the country’s largest cigarette
manufacturer.
The American Cancer Society opposes all tobacco use because of the
serious health risks associated with it, and supports a federal tax on
roll-your-own products, said Wendy Simpkins, a spokesman for the
group’s east-central division.
Lucas County Chief of Staff Bridgette Kabat said she was unaware of the
machines and said the county most likely would not possess the
authority to regulate them.
Although Mr. Markho is not opposed to a slight tax on the “smokes,” he
fears he would lose business if they are taxed at the same rate as
name-brand cigarettes.
Chris Markho, director of sales and marketing for Tobacco Haven, wants
legislators to look at alternative ways of taxing the product instead
of lumping roll-your-own cigarettes in with ready-made ones. “What we
are hoping is they create a new tax and put it in a whole new tax
bracket,” he said.
The Dayton Daily News contributed to this report.
Read this and other articles at the Toledo Blade
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