An Update on Commercial RYO Machine Legislation
State legislatures continue to adopt bills that regulate commercial roll-your-own cigarette machines. So far during 2012, eleven states have enacted laws that range from licensing RYO retailers, to paying an equivalent tax that is assessed on traditionally manufactured cigarettes, to outright banning the operation of the commercial cigarette rolling machines.
The states that have enacted new laws this year include the following:
Arkansas: The new law that went into effect on January 1, 2012 prohibits the operation of commercial RYO machines in the state.
Iowa: This new law will go into effect on July 1, 2012 and requires RYO retail operators pay a per cigarette state tax, use only federal tax paid RYO tobacco that is listed on the state's directory of approved tobacco brands, maintain a secure meter on a RYO machine that will count the number of cigarettes dispensed by the machine, and restricts RYO machines to adult only facilities. The law also requires compliance with fire safe cigarette standards, but such compliance is delayed until January 1, 2014.
Idaho: Beginning July 1, 2012, the Idaho law requires that retailers have RYO machines annually certified by the state attorney general's office. The certification process includes a requirement that all tobacco used in the machine, regardless of how the tobacco is labeled, must be of a brand family that is listed on the state's directory of approved tobacco brands and all applicable state tobacco taxes must also be paid.
Illinois: As of August 1, 2012, RYO machine operators are required to pay the new cigarette tax rate of $1.98 per 20 cigarettes with a credit for any OTP tax paid on the bulk tobacco used to make the cigarettes, to use only certified RYO tobacco that is listed on the state directory, to comply with federal and state labeling mandates for cigarettes, and provides that the attorney general will issue regulations for compliance with fire safe cigarette standards after January 1, 2014.
Oklahoma: On July 1, 2012, the use of RYO machines is prohibited in the state unless an operator obtains federal Alcohol, Tobacco Tax and Trade Bureau permit to operate as a cigarette manufacturer.
South Dakota: Effective July 1, 2012, RYO machine operators will be considered cigarette manufacturers under federal law and will need to comply with fire safe cigarette standards as of July 1, 2014.
Tennessee: The Tennessee law goes into effect on July 1, 2012 and requires a $500.00 per machine registration fee and the use of tobacco listed on the state directory of approved tobacco brands, and mandates that prior notice be given to the state of any new machines to be purchased and operated. Then, effective October 1, 2013, the law will classify RYO operators as cigarette manufacturers and requires the collection of the state cigarette tax rate.
Vermont: As of July 1, 2012, commercial RYO machines will be banned in the state.
Virginia: Beginning July 1, 2012, commercial RYO machine operators will be considered cigarette manufacturers and, therefore, will need to comply with appropriate cigarette tax rates and other requirements of cigarette manufacturers.
Washington: The new law set to go into effect on July 1, 2012 will equalize the state excise tax on RYO cigarettes to the same $3.025/pack on traditionally manufactured cigarettes, requires the use of cigarette tax stamps for RYO made products, and requires RYO stores to be licensed by the state.
Wyoming: As of July 1, 2012, the new law requires that any retail establishment possessing for operation a commercial "roll-your-own" tobacco machine will be classified as a cigarette manufacturer.