Excise Taxes

National

Cigarette ruling deals a blow to 'roll-your-own' retail shops
The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the U.S. Treasury has ruled that retailers selling cigarettes rolled in-store must obtain manufacturing permits and pay federal taxes on their products. About 150 stores in twenty states had been using high-speed rolling machines to manufacture cartons of cigarettes, which could then be sold for about half the cost of major brands due to lower state tax rates on the loose tobacco used in the cigarettes. The TTB decided that Congress had not intended to enable consumers to buy commercial cigarettes that had not been taxed appropriately, and therefore expanded the scope of taxation to include in-store manufacturing. Retailers must now acquire the proper permits, comply with recordkeeping regulations, and pay $10.07 in federal taxes for each carton made, which could make continued in-store cigarette manufacturing cost-prohibitive for many. Click here to read more or click here to read the ruling from the TTB.

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