42
TOBACCO BUSINESS
SEPTEMBER/OCTOBER 2013
ROLLED
But
NOT
Gone
MYO Club. The MYO Club, found
at myoclub.org, says that it is a “non-
profit social club formed by people who
share a common interest in making
cigarettes using whole leaf tobacco.”The
MYO Club explains on the website
that it “rents space in local tobacco
shops where members can meet, shred
and blend organic whole leaf tobacco
and use the club’s equipment to make
cigarettes for their own personal use and
consumption.”
Rolling to a Different Beat
Of course, unlike Tobacco Roll, most
big RYO machine retailers took the
money they made and left the business.
But there is also another route that
Tobacco Road smoke shop in Bethel
Park,Pennsylvania undertook—one even
RYO Machines According to TTB
In its guidance document, “Cigarette-Making Machines and Other Tobacco
Product Machines Made Available for Use by Consumers,” the federal Alcohol,
Tobacco Tax and Trade Bureau (TTB) states the following:
• The person who makes a machine available for consumer use is the person
liable for the federal excise tax on the tobacco products produced.
• A common business affected by the new federal law is the retailer who makes
cigarette-making machines available for the use of its customers.
• A person who sells a machine directly to a consumer at retail for a consumer’s
personal home use is not making the machine available for commercial purposes
and, therefore, not a cigarette manufacturer, if the machine is not used at a
retail location and the machine is designed to produce tobacco products only in
personal use quantities.
• A person who does make available a roll-your-own machine to consumers for
the purpose of manufacturing cigarettes will need to obtain a TTB permit to act
as a cigarette manufacturer, file federal excise tax returns and pay the applicable
excise taxes, pay a special occupational tax, obtain a bond, and comply with the
federal record keeping, reporting and inventory requirements.
Regarding “Clubs”:
The TTB guidance document also references the change
in federal law applying to those who have formed “non-profit”membership clubs
in an attempt to find a loophole in the above and avoid paying the federal excise
tax as well as avoid complying with the permitting, bonding, recordkeeping,
reporting and inventory requirements. It states: “Based on TTB’s current
understanding of these scenarios and the applicable law, it is extremely unlikely
that TTB will conclude that these [non-profit] organizations are exempt from
excise tax liability and associated IRC [Internal Revenue Code] obligations.”
SOURCE: TTB Notice on RYO Machines, October 2012
