TALLAHASSEE (CBSMiami/NSF) – Smoking cigarettes is not only bad for your health, it’s bad for your wallet. Cigarettes are expensive which has led to a growing roll-your-own industry across the state of Florida. With that growing industry, some Florida legislators want to cash in and tax shops that allow customers to roll their own cigarettes.
There are shops with names like “Let It Roll,” where smokers buy tobacco and cigarette tubes or rolling papers and put the ingredients into machines. Minutes later, they walk out with fresh cigarettes.
A House committee unanimously approved a bill Wednesday that could snuff out, or at least put a damper, on the industry. That bill (HB 615) would end an advantage that allows the shops’ roll-your-own cigarettes to avoid the per-pack taxes collected on Marlboros and other commercial brands.
Sponsor Mike Horner, R-Kissimmee, said the shops have opened across the state since lawmakers in 2009 approved a $1-a-pack increase in cigarette taxes. He said a carton of name-brand cigarettes can cost twice as much as the roll-your-own variety.
“This is a highly, highly lucrative business when you’re selling cigarettes at half price,” Horner told the House Finance and Tax Committee.
But shop owners, employees and lobbyists for a company that provides cigarette-rolling machines argued against the bill. With an estimated 110 roll-your-own shops across the state, they said the bill could threaten hundreds of jobs.
“The power to tax is the power to destroy,” said Jim Eaton, a lobbyist for RYO Machine Rental, the rolling-machine company.
Florida collects $1.34 in taxes on a standard pack of cigarettes. The tax is paid by wholesale distributors and then is passed along to retailers and, ultimately, customers.
Roll-your-own shops pay another type of tobacco tax, but critics say it is far less than the per-pack taxes on standard cigarettes. Also, at least some shops sell lower-cost pipe tobacco for rolling.
As a way to end the tax advantage, Horner’s bill would classify the roll-your-own shops as cigarette manufacturers.
But Richard Boensch and Jay Goldberg, whose Let It Roll business has shops in Central Florida and Gainesville, said they are far from manufacturers. They said customers load the machines and package the cigarettes, with employees only working at the shops’ counters.
But James Mosteller, a lobbyist for the American Heart Association, said the shops are set up to avoid taxes and that their products have the same health effects as name-brand cigarettes.
“A cigarette is a cigarette is a cigarette, and they should all be taxed at the same level,” Mosteller said.
“The News Service of Florida contributed to this report.”