RYO Tobacco Retailers Subject to Federal Tax Requirements of Manufacturers

Retailers with roll-your-own (RYO) cigarette machines soon will be subject to the same federal tax and regulatory requirements as tobacco manufacturers. 

The Sixth Circuit Court of Appeals last week overturned an injunction preventing the Alcohol and Tobacco Tax and Trade Bureau (TTB) from treating retailers with RYO tobacco machines as tobacco manufacturers. In lifting the injunction, TTB will be able to enforce federal tax and regulatory requirements against RYO retailers. It remains unclear, however, when TTB will begin enforcing the new federal law.

The court ruled that language contained in the transportation legislation, which was signed into law by President Obama, has rendered this case moot. The legislation included language stating that retailers who operate RYO cigarette machines are considered to be manufacturers of cigarettes and therefore must seek all permits and pay all applicable taxes and bonding.

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This article originally ran in NATSO News Weekly (NNW), NATSO's member only weekly electronic newsletter. NNW is packed with the latest updates on government and business issues affecting the truckstop and travel plaza industry.

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