I thought “Roll-your-own” meant a can of Prince Albert and a folder of Zig-Zag.
Forgot to mention Bull Durham.
As members of Congress hailed the transportation bill that passed on Friday as an engine for job growth, several local business owners said it could destroy them and put thousands out of work.
An amendment in the transportation bill expands the definition of a tobacco manufacturer to include businesses that operate roll-your-own cigarette machines. It requires the businesses to get manufacturing permits, place health warnings on packs and pay excise taxes on the cigarettes their machines make.
Local business owners said they must stop using their machines by midnight tonight, when the legislation is expected to take effect. President Obama had yet to sign it into law as of late Friday.
It was not clear if Obama’s signature on a one week, temporary measure would halt use of the machines.
“As of right now, we’re not putting in any more orders for tobacco,” said Andrew Serwatka, 22, whose family owns Steel Town Tobacco in West View. “If this is permanent, we’ll probably just close our doors.”
Roll-your-own machines have grown in popularity in recent years. Smokers can churn out the equivalent of a carton of cigarettes in about 10 minutes. It typically costs about $25 to pay for the tobacco, cigarette papers and use of a rolling machine. A carton of manufactured brand-name cigarettes costs at least twice as much.
About 20 stores in Allegheny County have roll-your-own machines, which are almost the size of a refrigerator and can retail for more than $30,000. Several dozen more stores are scattered across the rest of Western Pennsylvania.
“I guess I can use it as a paperweight,” Roy Albert, owner of Tobacco Road of Bethel Park said when asked what he plans to do with his machines.
Albert said he notified eight employees that they are being laid off effective midnight today.
Sharon Kinjerski, owner of Roll With It Tobacco in Ambridge, laid off five employees. She plans to keep her store open as a one-woman operation at least until her store lease expires late this year. Then she’s not sure what she will do. She’ll still owe money on her $32,000 rolling machine, manufactured by RYO Machine LLC of Girard, Ohio.
RYO has more than 2,000 rolling machines in more than 1,400 stores in the country. Company spokeswoman Bea Gonzalez estimated “several thousand” people work in the stores.
Gonzalez said roll-your-own businesses should not be classified as manufacturers because customers make their own smokes.
She added that the small business would not be able to meet all of the complex rules needed to obtain a manufacturing permit.
Roll-your-own businesses have been challenged in many states, with lawmakers accusing them of skirting the federal cigarette tax of $1.01 per pack.
“We’ve been winning in most states,” Gonzalez said, noting that 11 states have passed legislation restricting the machines in one way or another.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he sponsored the measure to close the tax “loophole” and generate $94 million for a rural education program.
His office did not return a call seeking comment.
“We’re trying to avoid closing, not taxation,” said Josh Egal, owner of the Smoke Stack, with stores in Moon and Imperial. “We’re more than willing to pay.”
The measure did not surprise Daniel Jacobs, a co-owner of the Rolling Express chain that has outlets in Cranberry, Chicora and Warren.
“The middle class is always getting taxed, and this is another example. (The government is) missing tax dollars because the machines are saving people money,” Jacobs said.
He said he and his partners are weighing their options.
“Maybe we’ll give it a month or two to see how consumers react and what direction they are going to go,” Jacobs said. “Hopefully they will stay with us and roll their own cigarettes at home.”