Cigarette manufacturers, distributors, and retailers are joining forces to try to stop the new “Roll Your Own machines” in Iowa tobacco shops before the legislature wraps up for the year. Customers can buy loose tobacco and use the machines to roll cigarettes at half the cost of regular smokes.
Philip Morris lobbyist Dave Scott says the machines could take thousands of dollars in business away. “The state of Wisconsin estimates they are losing $278,000 annually from a machine. If you want to let these machines in all the stores around the state see what happens to your tobacco revenue. Go ahead get everybody in the business,” Scott says.
Scott is pushing for passage of a bill to make customers pay the same tax on the rolled cigarettes that they do on regular smokes, which would take the price advantage away. Philip Morris Lobbyist Cal Hultman also supports the bill.
“We pay federal excise tax of 10 dollars and 10 cents per carton. We pay 13 dollars and 60 cents state excise tax, and then we pay a sales tax. So we do pay tax,” Hultman says. “All we’re saying is tax equity. A cigarette is a cigarette is a cigarette.”
In addition to big tobacco, the Iowa Retail Federation, convenience stores, petroleum marketers, all the groups that stand to see fewer cigarette sales are joining forces for a bill to equalize the tax. Representative Eric Helland, a Republican from Johnston, says the lobbying has been fierce.
“This has been an extremely intense issue. The crux of the question is how to apply the tax that’s equitable and fair to all the parties at the table,” Helland explains. Tobacco store owners and the manufacturer of the machines are pushing back from the other side.
“We’re kind of in the middle. I don’t think this is as clear as it could be and should be, however I think we need to get moving, and we need to move quickly because the session will be wrapping up soon,” Helland says. There are “roll your own” machines in Marion, Dubuque, and Davenport.
Some smoke shop owners say they’re waiting to see what happens with the tax dispute before they invest in a machine.