The state is putting “roll your own” cigarette retailers on notice. Letters were sent out Friday to businesses offering the use of the sophisticated machines, which are capable of producing a carton of cigarettes in just a few minutes, notifying them that they are violating state laws on the collection of tobacco taxes.
Customers put loose tobacco in the machines, which then use cartridges to produce cigarettes. The retailers argue they are not subject to the same taxes that are applied to a pack bought at the store because it’s the customer making the cigarettes. The perceived loophole results in prices that don’t include the $2.52 per pack other retailers are forced to collect.
Stephanie Marquis with the state Department of Revenue says state laws indicate that who makes the cigarettes does not matter, if they are being manufactured in a store then state taxes apply. She says the notices direct the retailers to obtain the proper permits and certifications required to sell tobacco in Wisconsin, and to also put tax stamps on the products they are selling.
Marquis says DOR is currently focused on making the retailers aware of their legal obligations and to also gather a record of exactly where the machines are use. The agency estimates anywhere from 50 to 100 of the rolling machines are in operation, which is based largely on online searches for companies that offer the service.
DOR is also encouraging the public to report retailers who have the machines by contacting the agency’s Alcohol and Tobacco Enforcement Unit.
