AIF Supports Closing Unfair Cigarette-Tax Loophole

By: Tom Feeney | Posted: April 26, 2012 3:55 AM
Tom Feeney

Tom Feeney

Imagine a business thriving in today’s economy that does not have to follow the same rules and regulations as similar businesses like it must. While you might think that once exposed, the business would be shut down or be reprimanded, however that is not the case for roll-your-own cigarette manufacturers who are running operations throughout the state and country.

On behalf of Associated Industries of Florida, we support legislation currently before Congress, HR 4134, which would help end the exploitation of a tax loophole to sidestep rules and regulations. Unfortunately, roll-your-own cigarette manufacturing is a growing trend that some retailers have adopted to produce cigarettes at remarkably low rates. Through roll-your-own manufacturing machines these retailers are evading state and federal cigarette taxes that are paid by law-abiding traditional retailers and convenience stores. The proposed legislation is simply a common-sense solution that will require roll-your-own operators which sell these products to compete on a level playing field, thus protecting the thousands of Florida small businesses and their employees, who are required to follow industry rules and regulations.

While AIF supports entrepreneurial spirit, the business model for roll-your-own manufacturing has created an unfair advantage as such operators evade state and federal rules regarding the taxation, distribution and other product regulations that apply to traditional cigarettes. Since consumers operate their retail manufacturing machines to roll their own cigarettes, the retailers falsely claim that they are not manufacturers. This is a deliberately untrue assertion that creates artificially low prices and damages the competitive marketplace.

Not only does retail cigarette manufacturing erode the Master Settlement Agreement payments made to the state, but it threatens the sustainability of traditional retailers who are following the rules. Many of these retailers are members of AIF who have shared their struggle to keep up with the unfair competition that roll-your-own manufacturers pose to the industry. Another disconcerting fact is that these unregulated cigarettes do not comply with state fire standards and are not labeled with the congressionally mandated surgeon general warnings, which are meant to protect consumers.

It is in the best interest of small businesses across Florida and consumers, that we close the loophole on roll-your-own cigarette manufacturing. We urge all Floridians and Florida’s congressional delegation to support HR 4134 to protect the state’s hard-working retailers and the people they employ. The passage of this important legislation will help Florida and the rest of the country resolve this economically damaging situation and allow retail businesses nationwide that follow the rules to continue to grow and thrive.

Tom Feeney is president of the Associated Industries of Florida.

Comments (3)

8:05PM APR 29TH 2012
More on this subject. The vendor that I go to, does NOT manufacture anything. He sells me the tobacco and the tubes. I sit down in his shop and I manufacture the cigarettes. BIG difference.
The only reason this has come up is because BIG tobacco is losing money as people realize they don't have to smoke CHEMICALS anymore. And, it is a sad situation when lawmakers hurt the little guy by throwing huge taxes on something that they deam unhealthy or unsafe. Who the hell are they to decide? I have worked with many nonsmokers, and they seem to be the ones that are always out sick and taking time off. I am RARELY sick and take time off. Maybe it's BECAUSE I have less stress as a smoker.
Also, why won't you go after alcohol? Because ALL the politicians love their drink. Smokers don't kill other people with their drunk driving. Alcohol wrecks families. I know first hand. I intended to be married for the rest of my life, but alcohol made a different decision for me. He is now dead.
Put those huge taxes on alcohol too. Make it REALLY fair.
6:28PM APR 29TH 2012
Your opinion on the "roll your own" is hogwash, and I'm sure based on information from the "traditional" cigarette manufacturers.
I smoke the "roll your own". They are saving me almost $200 a month. Not only that, THEY ARE CHEMICAL FREE, unlike traditional cigarettes. AND, after cleansing the body of chemicals over 2-3 weeks, I feel MUCH better. Yes, I said it. I smoke and I feel MUCH better. I am not poisoning my body with CHEMICALS!
Think about it: back in the time that tobacco was grown and smoked, you didn't hear of people dieing from lung cancer and other diseases. When BIG tobacco came into being, and filled the cigarettes with CHEMICALS, that's when the real trouble began.
Why don't you be honest? You are only lobbying for higher taxes, and trying to save the dishonest tobacco companies. Why don't you lobby for honest, CHEMICAL FREE tobacco. Yeah, I know, you want me to quit. Well, I don't plan to. I'd like you politicians to quit drinking too, especially, when you drive. But, you will NEVER touch that one. It's not politically correct.
Leave my tobacco alone. It's one of the cleanest things on this earth, unlike the food the government allows to be PROCESSED in this country.
Quit looking for the little guy to dig yourself out of a financial hole with, by upping taxes. Cut the fat, it will have the same effect.
NOT ON H.R. 4134!
2:10PM APR 27TH 2012
I thought that Republicans and conservatives were against all these government imposed regulations and taxes. I guess neither party really wants to allow the people to live under a smaller, limited government.

Once a government critter gets the power-fever, they cannot stop pushing rules, laws and regulations on the populous even when they get voted out of office. Otherwise Feeney would be advocating that the retail cigarette vendors and manufacturers should NOT have to have such high taxes and regulations imposed on their products.

Where there is a law, there is a loophole. It is up to the people to find those loopholes before the government critters close them. The more corrupt the government critters, the more laws and regulation they impose.

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