The Walker administration and state officials have contacted roll-your-own cigarette companies and warned them they will no longer be able to avoid paying the state’s cigarette tax.
According to a statement from the Wisconsin Department of Revenue, the businesses responsible for selling and renting the roll-your-own cigarette machines to tobacco stores should be considered both manufacturers and distributors. Under this distinction, they would not be allowed to avoid the state’s tax on cigarette retailers.
The machines offer the same type of tobacco as store-bought cigarettes, Health First Wisconsin spokesperson Emily Rohloff said. She said when a customer enters a store, they can request a specific tobacco based on what brand they normally prefer to smoke.
Once the rolling papers have been purchased, both the paper and the tobacco are put into the machine by the customer, Rohloff said. In approximately 20 minutes, the patron exits the store with as many roll-your-own cigarettes as they wish, each one very similar to the pre-packaged product, she said.
Rohloff said the roll-your-own cigarette machine companies feel the new tax requirement is an unjust change because they are not the ones manufacturing and distributing the cigarettes. Since the customers actually fill the machines, the companies behind them feel they should not be taxed, she said.
Still, Rohloff said this tax change is a promising idea.
“Some of the most price-sensitive consumers of tobacco are youth. By having cheaper cigarettes, it makes cigarettes more acceptable and more affordable,” Rohloff said.
As of now, Rohloff said a carton of cigarettes bought pre-packaged in a store totals around $36 in state and excise taxes. On the other hand, the tax on roll-your-own cigarettes is only about $7. The Department of Revenue wants the two to cost the same.
Rohloff said aside from preventing youth from starting to smoke and bringing in extra state revenue, the proposal could keep adults from starting or continuing to smoke.
“[The lower price of roll-your-own cigarettes makes it] easier for a kid to start because they can afford it more,” Rohloff said. “It also makes it harder for adults to quit.”
Rep. Evan Wynn, R-Whitewater, supports the proposal.
In a statement, Wynn said he approves of the actions on behalf of Gov. Scott Walker and the Department of Revenue and has expressed his desire for a speedy implantation. He said he sees no difference in cigarettes manufactured in a plant or an in-store machine.
“The roll-your-own machines have been a concern of mine since I came into office,” Wynn said. “While I am against any increased or new taxes, this move by the Department of Revenue is about tax fairness.”
While the exact number of machines in the state of Wisconsin is unknown because of the lack of permits, the Department of Revenue is moving to solidify the new tax change starting with the makers of the machines, according to the WDR statement.