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The selection of paper tubes that can be used at Tobacco Junction. Photo by Katrina Roi.

The selection of paper tubes that can be used at Tobacco Junction. Photo by Katrina Roi.

KUOW News

Owners Of Roll-Your-Own Tobacco Shops Say New Law Will Put Them Out Of Business

Katrina Roi
04/23/2012

Owners of small roll–your–own tobacco shops say Washington state's new law will put them out of business. The state expects to raise $13 million per year by classifying roll–your–own businesses as cigarette manufacturers. But even the bill's sponsor isn't completely satisfied with the way it turned out. KUOW's Katrina Roi has more.

TRANSCRIPT

The new law helped to balance Washington's budget. It will require the owners of roll–your–own tobacco shops to get a license, add tax stamps to their products and enforce new customer rules. The changes take effect July first.

The bill was sponsored by State Representative Steve Kirby. In retrospect, he's not sure he likes the way the bill ended up.

Kirby: "Does this have the possibility of being a big old screwed–up mess for some period of time? Certainly it does! And it's because whenever you get the curious mix of tobacco companies and anti–tobacco folks fighting for the same bill, that should be a red flag for anybody that's been doing this for any amount of time. And it certainly was for me."

One store that would be affected is Tobacco Junction in Seattle's Rainier Valley. The shop sells pipe tobacco and paper tubes. Customers pay to use a machine that rolls those into cigarettes.

Goodall: "Go ahead and take this whole box, put it right in there."

Renee Goodall co–owns the store with her son and daughter. Her customer puts tobacco in the top of the machine, inserts paper tubes and hits start.

Goodall: "Have a seat."

Sound: (Machine starting up.)

One cigarette at a time pops out of the machine. They look a lot like ones you'd buy in a pack, but Goodall says her cigarettes have imperfections, and so they cost less.

Twenty cigarettes at Tobacco Junction are $5.45, whereas a pack of Marlboros is $8 or $9.

Supporters of the new regulations say roll–your–own cigarette shops have been taking advantage of tax loopholes.

Tobacco Junction sells pipe tobacco, which is taxed at a much lower rate than cigarette tobacco. And the store avoids Washington's dollar–per–pack tax on pre–packaged cigarettes.

Goodall says the new rules will be an overwhelming burden.

Goodall: "If everything goes like I am afraid it will, it's gonna shut us all down. There's no way we can comply and we'll have to just shut our doors."

Patrick Monrean is a regular who lives nearby. He buys roll–your–own cigarettes because they're cheaper.

Roi: "What does it mean to you that potentially there's going to be a new tax that will make it harder for businesses like this to operate?"

Monrean: "That's great for the government, but it hits poor people in the pocket. A lot of us, after 30 to 40 years, we can't give up smoking anymore. At my age right now, I'm 54, I don't want to give up smoking. I enjoy smoking."

State Representative Kirby actually voted against a tax hike on cigarettes two years ago. He says the focus of his roll–your–own bill changed dramatically as it progressed through the Legislature.

Kirby: "You know there's a certain amount of discomfort with this bill for me. Because to me, when I took it on, it was a consumer protection bill. It had to do with keeping kids from having access to cigarettes and making sure people were only rolling cigarette tobacco in these machines."

Kirby says roll–your–own supporters could propose legislation to delay the impact of his bill, but shops would need to stay in business for six months while they wait for the next legislative session in January. Kirby says it's pretty unlikely that new legislation would succeed.

Governor Gregoire is expected to sign the budget on Wednesday.

Renee Goodall is worried about what's coming. She says she was unemployed for a year before starting Tobacco Junction, and she put everything into the store.

Goodall: "It's not gonna be good. I mean I can't go bankrupt. I borrowed money from my family. You don't go bankrupt on your family. You pay them back. So it's gonna mean just going out and trying to find a job."

Critics of the roll–your–own law may oppose it on the grounds that it's a new tax. In Washington state, new taxes need a 2/3 majority. The roll–your–own regulations passed without a 2/3 majority in the senate.

For KUOW, I'm Katrina Roi.

© Copyright 2012, KUOW

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