Florida lawmakers are preparing legislation to expand the definition of what it means to be a cigarette manufacturer. The plan has its sights set on small roll-your-own cigarette shops.
If you’re looking for excitement, the House Finance and Tax committee is probably not at the top of the list. But committee chair, Rep. Matt Gaetz (R-Fort Walton Beach) is doing his best to liven things up. How’s he doing it? Field trips. In a recent hearing he gave the floor to Rep. Jared Moskowitz (D-Coral Springs) to relate their most recent escapades.
“At this fine establishment you can purchase cigarettes,” Moskowitz says, “which I did.”
As he’s speaking Moskowitz pulls out a small box—about the size of the ones you might see in a grocery store check-out aisle full of breathmints, gum or candy. Moskowitz explains it’s a carton of cigarettes.
“Actually you purchase the loose tobacco, and then you step eight feet to your right and behind a glass wall in which an electronic machine will then roll those cigarettes,” Moskowitz says.
While the idea of cigarette cartons made-to-order might evoke pricey adjectives like ‘boutique’ or ‘craft’, this is the exact opposite.
“I’m able to buy these 190 cigarettes for $21 and change, and it is exactly like the Marlboro Lights cigarettes that I would buy somewhere else for almost double the price,” Moskowitz says. “And why is that? It’s because this establishment doesn’t have to pay the taxes.”
So-called roll-your-own cigarette shops can offer such low prices because they’re avoiding a tax on manufacturing.
“They would be 85 percent more expensive,” Gaetz says, “if Rep. Moskowitz and Rep. Rodrigues—under names that were not their own—were not deemed by Florida law to be the manufacturer because they simply caught the cigarettes as they were spit out of the roll-your-own machine.”
If anything, Gaetz and Moskowitz are underselling the savings: a convenience store chain’s Tallahassee location sells Marlboro Lights cartons for just over $58—about 175 percent more than the $21 Moskowitz spent.
The machines are wood-veneered cabinets about chest high, inside is a small round drum with six cigarette sized holes. Each second, it spins one-sixth of a rotation, and the machine feeds a new cigarette tube into one of the holes. Then the drum turns again, and a pneumatic piston packs loose tobacco into the tube. Next thing you know, a freshly-packed cigarette is rolling down the ramp on the front of the machine.
The shop I visited didn’t want to be identified and the owner didn’t want to speak on the record.
Actually every tobacco shop—whether they run systems like this one or not—didn’t want to talk to me. An employee at one even seemed to think I might be an undercover cop—holding off transactions until I left the store. But they have good reason—they’re operating in a legal gray area. Shop owners say they aren’t manufacturing, they’re simply renting the machines to customers who pay to join a roll your own club.
One of those customers is Loretta Kelly. “You know, my husband passed away,” Kelly says, “I’m on a fixed income and I don’t know what I would do if I couldn’t come here and get them rolled. Because I can’t afford $60 to $70 for a carton of cigarettes.”
And some lawmakers aren’t interested in expanding the definition of manufacturer to cover roll-your-own shops. Rep. Mike Hill (R-Pensacola) says he’s never met a tax that he likes.
“There’s also what’s called regulatory arbitrage,” Hill says, “in that we can pass rules and regulations, but somebody’s going to find a way around it like these guys did.”
But most committee members seem inclined to consider an expansionary measure. Gaetz tapped Rep. Scott Plakon (R-Longwood) to draft the proposal. In recent years similar plans have been unsuccessful, but shop owners are nervous—without discount cigarettes to offer, many would be forced to close their doors.
