Roll-Your-Own Cigarette Machines Evade Steep Tax

Monday, August 30th, 2010

Roll-Your-Own cigarette machines are helping smokers and tobacconists evade steep taxes in a fairly predictable manner:

At Smoke Zone and other retailers, The Wall Street Journal found, store employees or customers insert into the machines tobacco labeled “pipe tobacco.” This substantially reduces the stores’ and smokers’ costs because the federal excise tax on pipe tobacco is $2.83 a pound — compared with $24.78 a pound for the rolling tobacco traditionally used to make hand-rolled cigarettes.

Congress in 2009 sharply raised the federal excise tax on rolling tobacco to help finance the expansion of a children’s health-insurance program backed by President Barack Obama.

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