Michigan Treasury issues warning to tobacco shops on rolling their own cigarettes
The Michigan Department of Treasury has warned 300 tobacco shops that machines they have which roll cigarettes on location may be considered illegal.
The $30,000 machine rolls about 20 cigarettes an hour, the company that produces the machine says.
“A cigarette manufacturing machine will roll upwards of 20,000 cigarettes a minute,” [RYO president Phil] Accordino said. “Ours may hit about 20. It defies logic to say that our machine is a manufacturing device.”
The machine rolls the cigarettes from pipe tobacco which is not taxed as heavily as pre-rolled cigarettes, according to the Associated Press.
Because of a bargain tax rate on pipe tobacco created by Congress, smokers can take a box of pre-made cigarette tubes, 8 ounces of tobacco and 15 minutes to produce a carton for under $30 — much less than retail. Federal tax is $1.01 on a pack of cigarettes, with another $2 added by the state.
In relation to state taxes, some of that money is directed into the state school aid fund which has struggled in previous years to adequately fund public schools.
The state warned the businesses in March, to date, however, department officials say no business has been cited.