The Herald of Everett, Washington
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Jerry Cornfield | jcornfield@heraldnet.com
Published: Monday, June 25, 2012, 6:12 p.m.

Judge blocks tax on roll your own cigarettes

A Franklin County Superior Court judge today said the state cannot impose an additional tax on cheaper smokes known as roll-your-own cigarettes.

In an oral ruling, Superior Court Judge Bruce Spanner issued a preliminary injunction preventing the state from collecting the tax July 1 as planned. Spanner said under voter-approved Initiative 1053, lawmakers needed at least a two-thirds majority to approve the tax and failed to obtain it.

The state estimated the tax would bring in about $137,000 a day.

In April, as part of the final agreement to balance the budget, a bipartisan majority of lawmakers passed House Bill 2565 requiring operators of roll-your-own stores to collect a tax on cigarettes produced by cigarette-making machines. Supporters said the bill would ensure those rolling their own cigarettes paid the same amount of tax as those who buy pre-packaged smokes.

The House passed the bill on a 66-32 vote which met the two-thirds requirement. However, the Senate vote of 27-19 approving the measure was less than two-thirds of that chamber.

Joe Baba, owner of Tobacco Joes roll-your-own store in Everett, fought passage of the bill and considered filing his own lawsuit against the tax. He was in the court room when Spanner issued his decision.

“I'm elated,” Baba began, “that the judge ruled in our favor supporting small businesses and allowing our stores to stay open and offer customers the ability to make their own smokes without new taxes and government interference.”

The lawsuit was filed against the state Department of Revenue by the owner of a roll your own store and one of their customers. The Attorney General's Office is defending the state agency.

State officials said late Monday they are evaluating whether to seek a stay of the injunction and appeal the decision.

“The judge believes that the Legislature would have had to comply with the two-thirds majority requirement for tax increases in order to enforce and collect taxes from “roll your own” cigarette machines. We argue that the cigarette machine legislation did not impose a new tax but rather provided a new method of collecting an existing cigarette tax previously uncollected because the state lacked an effective means of collecting it,” said AG spokesman Dan Sytman.
Story tags » GovernmentStateTaxes

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