July 22, 2010 - New Hampshire has sued two businesses that allow customers to roll their own cigarettes (RYO) and that have avoided paying a two-cents per cigarette fee, the New Hampshire Union Leader reports.
According to the lawsuit, retailers Smoke N Discounts of Epsom and Tobacco Depot of Seabrook, recently installed cigarette-making machines that allow customers to make a carton of cigarettes in less than ten minutes, using pipe tobacco and other materials that the stores sell. According to New Hampshire Attorney General Michael Delaney, such an arrangement classifies the stores as cigarette manufacturers, and as such, they must comply with the Non-Participating Manufacturers Act and the Directory Act.
Under New Hampshire law, cigarette manufacturers must join the Master Settlement Agreement (MSA) of 1998, which requires tobacco companies to pay $50 million a year to cover Medicaid costs incurred by patients suffering from tobacco-related illnesses. The concern for the state is that unless it enforces the law by prosecuting retailers whose actions classify them as tobacco manufacturers, the tobacco companies will stop paying their annual $50 million settlement.
While New Hampshire requires cigarette manufacturers to join the MSA, it allows those who don't to pay into an escrow account an amount based on the number of cigarettes produced—about two cents per cigarette or $4 a carton. The state alleges that the retailers named in the suit, who did not join the MSA, have failed to make such a payment.
New Hampshire previously filed suit against a retailer engaged in similar roll-your-own practices, and a court ruled in the state's favor.
A temporary hearing has been set for August 27 in Merrimack County Superior Court.
References: Retailers Sued Over 'Roll-Your-Own' Cigarettes State argues that retailers should be reclassified as tobacco manufacturers, and thus liable for cigarette fee, NACSonline.com (National Association of Convenience Stores), 7/22/2010; State sues Tobacco Depot by Patrick Cronin (firstname.lastname@example.org), Seacoastonline.com, 7/23/2010..
New Hampshire - some related news briefs:
New Hampshire - high school students smoking less but smokeless tobacco and cigars use UP..;
New Hampshire - legislation to ban smoking on beaches filed..;
New Hampshire Cigarette Tax Goes Up By 25 Cents A Pack..;
New Hampshire - cigarette tax increase - ON HOLD..;
Massachusetts cigarette tax jumps $1 per pack..;
uly 1, 2007 - as of 7/1/2007 Smokers in five states will take a hit to their wallets as the tax increase..;