Close tax loophole for RYO cigarettes

The Madison County Record May 30, 2012, 11:30am


To the Editor:

I am writing to alert your readers to yet another tax loophole our government allows enabling retailers to install Roll Your Own (RYO) cigarette manufacturing machines and then claim that no one is the manufacturer of the cigarettes in order to bypass federal and state laws.

As chairman of the Illinois Young Republicans, we are for free market economic policies. But without H.R. 4134, this tax code loophole is creating economic distortions in the marketplace, not to mention undermining important laws such as fire safety standards for cigarettes.

RYO cigarette manufacturing machines make packs of cigarettes within minutes. Consumers leave a store with cartons of cigarettes, no different than if they went in to purchase a regular carton of cigarettes, yet don't have to pay the $1 per pack FET passed by Congress in 2009, will not have to pay the newly passed state excise tax increase on cigarettes, payments agreed upon under the state settlement agreements or the proper sales taxes on the higher sales price if excise taxes had been included.

By allowing the retailers to sell the cigarettes without the proper labeling and at unfairly low prices, it creates a business model that threatens the livelihoods of traditional retailers and drains state tax revenues leading to a bigger budget deficit for the State of Illinois.

In addition, these RYO cigarettes do not comply with state fire standards for cigarettes, do not display the Congressionally mandated Surgeon General warning labels and do not meet other FDA regulatory criteria for cigarettes.

I urge your readers to contact their Congressional leaders and ask them to vote for H.R. 4134 to close the tax loophole and uphold safety regulations.

Dennis Cook, Chairman
Illinois Young Republicans

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