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NYC sues roll-your-own cigarette shops


Wickian
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NEW YORK (AP) — There is no place in the U.S. more expensive to smoke than New York City, where the taxes alone will set you back $5.85 per pack. Yet, addicts who visit Island Smokes, a "roll-your-own" cigarette shop in Chinatown, can walk out with an entire 10-pack carton for under $40, thanks to a yawning tax loophole that officials in several states are now trying to close.

The store is one of a growing number around the country that have come under fire over their use of high-speed cigarette rolling machines that function as miniature factories, and can package loose tobacco and rolling papers into neatly formed cigarettes, sometimes in just a few minutes.

The secret to Island's low prices is simple: Even though patrons leave carrying cartons that look very much like the Marlboros or Newports, the store charges taxes at the rate set for loose tobacco, which is just a fraction of what is charged for a commercially made pack.

...

A pack contains 20 cigarettes and sells for around $13 in New York City after taxes are added. That compares with the national average in 2010 of $4.80 a pack, according to the Centers for Disease Control and Prevention. A pack from Island Smokes can cost less than $4 a pack.

Everything about the business is legal, precisely because the company is neither selling cigarettes, nor manufacturing them, said Jonathan Behrins, a lawyer for Island Smokes. It is simply selling loose tobacco and tubes, he said, and giving customers access to the rolling machines to make the cigarettes themselves.

http://news.yahoo.com/nyc-sues-roll-own-cigarette-shops-over-taxes-073231566.htmllink

The city is pretty upset a business is following existing laws to make a profit. The article does seem a little biased though, half of it is commentary about how greedy the city is with all it's taxes and fines.

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http://news.yahoo.com/nyc-sues-roll-own-cigarette-shops-over-taxes-073231566.htmllink

The city is pretty upset a business is following existing laws to make a profit. The article does seem a little biased though, half of it is commentary about how greedy the city is with all it's taxes and fines.

I've gotta agree with you.

Although, that said, you folks in the States are lucky. Five bucks for cigs? The cheapest "legal" packs here in Ontario are roughly $7.20. Good packs are ~10 dollars or more. You can go to Amerindian reservations and buy very cheap and strong cigarettes but it's really semi-legal, and they don't taste the best.

Would the state be angry if someone developed a very cheap machine that patrons could buy to roll their own loose tobacco? I mean, it's the same thing. If you could buy such a machine for 15-30 dollars and use it at your own home, would they raise the tax on loose tobacco simply because access to such a tool was more available?

Seems illogical to me.

That said, I do support taxation of drugs like alcohol and tobacco (cannabis and/or others if in a decriminalized area), for distribution primarily to education and healthcare.

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I have a friend in Orlando that recently started to go to a shop where you can roll your own cigarettes. He said it saves him ALOT of money. The taxes on cigs in Florida is nothing compared to NY so I can only imagine that in MY this is the sort of thing that could catch like a wildfire and therefore it really would put a dent in the taxes gathered. Still ... "the taxes are too damned high" (Pardon the Jimmy McMillan reference) in NYC and it is no wonder people are trying to dodge the exorbitant tax rates.

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One commenter in the original article had a nice idea if the city starts to crack down on them. Open up 2 shops right next to each other, sell the loose tobacco in one and rent the rollers for dirt cheap(say quarter machines) in the other. Neither shop would sell or provide the necessary tools/ingredients to make a rolled cigarette by itself.

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One commenter in the original article had a nice idea if the city starts to crack down on them. Open up 2 shops right next to each other, sell the loose tobacco in one and rent the rollers for dirt cheap(say quarter machines) in the other. Neither shop would sell or provide the necessary tools/ingredients to make a rolled cigarette by itself.

That is a good idea, I don't think both shops should have the same owner though. I think that would make it even harder for the city to crack down. Maybe a good business idea would be to open up a cigarret rolling shop along side already existing tobacco shops that don't have the rolling machines. It would be a win/win, the tobacco shop owner would see an increase in business without the worry of a city crack down.

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Seems a bit harsh. But smoking is pretty dumb and bad for people and over here in the UK has an estimated cost to tax payers of about £5billion in NHS costs every year!!! So I'm all in for them raising the price of tax on tobacco to even triple what it is now, they should make tobacco taxable by weight rather then type.

Edited by bulveye
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I quit buying smokes back in the summer. I bought a tops rolling machine for $35. Bag of tobacco is $15ish and makes two cartons. Carton of tubes is >$2. So it costs me about $19 for two cartons of cigs plus rolling time. I can crank out a pack in 5 mins. $8 a carton. Screw NYC though for being so anal. Sounds like they are acting as henchmen for the big tobacco companies.

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They've been trying to find a way to bust shops in Washington State for doing the same exact thing for over a year. I know of two stores that the state has managed to shut down over this roll your own to avoid taxes tactic. And in Washington, cigs are $8.55 a pack roughly often more.

I have friends who are smokers, I'd say about half of them have bought rolling machines and filtered papers and make their own at home now for about a quarter of the price of buying a pack at a convenience store.

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I've gotta agree with you.

Although, that said, you folks in the States are lucky. Five bucks for cigs? The cheapest "legal" packs here in Ontario are roughly $7.20. Good packs are ~10 dollars or more. You can go to Amerindian reservations and buy very cheap and strong cigarettes but it's really semi-legal, and they don't taste the best.

Would the state be angry if someone developed a very cheap machine that patrons could buy to roll their own loose tobacco? I mean, it's the same thing. If you could buy such a machine for 15-30 dollars and use it at your own home, would they raise the tax on loose tobacco simply because access to such a tool was more available?

Seems illogical to me.

That said, I do support taxation of drugs like alcohol and tobacco (cannabis and/or others if in a decriminalized area), for distribution primarily to education and healthcare.

It isnt 5 bucks for a pack, its 5 bucks just in taxes for a pack. Its between 11 and 13 dollars for a pack in the city.

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It isnt 5 bucks for a pack, its 5 bucks just in taxes for a pack. Its between 11 and 13 dollars for a pack in the city.

I didn't misread it:

A pack contains 20 cigarettes and sells for around $13 in New York City after taxes are added. That compares with the national average in 2010 of $4.80 a pack, according to the Centers for Disease Control and Prevention. A pack from Island Smokes can cost less than $4 a pack.

That's a national average of ~5 bucks a pack.

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Over here in California they're around 4-6 dollars a pack, I don't smoke so I'm not 100% sure.

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tobacco and cigarettes are different beasts altogether.

I wonder why there is a need of these rolling machines, i have been rolling smokes by hand alone for years, not difficult, just the way tobacco was smoked in the good old days, before the chemicals to make one addicted and sick

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Seems a bit harsh. But smoking is pretty dumb and bad for people and over here in the UK has an estimated cost to tax payers of about £5billion in NHS costs every year!!! So I'm all in for them raising the price of tax on tobacco to even triple what it is now, they should make tobacco taxable by weight rather then type.

This logic could be applied to so many things (i.e. fast food, alcohol, etc...). Are we going to limit the amount of times someone can eat at McDonalds or tax a six pack of beer so that it costs 15$ ... NO! People should have the right to smoke a cigarette or eat fattening food or drink alcohol. It's what freedom is all about.

Healthcare systems are littered with waste. Smoking has just been the easy target over the last 20 years. Since you don't smoke you don't mind, but wait until something you like to do is the next easy target and see how it feels to have your government (whom you finance thru taxes) tell you what you can and cant do.

Edited by JaySleeps
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