AWMA Supported RYO Language Adopted As Part of Transportation Conference Report
Legislation AWMA supported to classify retailers who offer "roll-your-own" (RYO) machines to their customers as "manufacturers" was approved late last night by a Senate-House conference committee. The provision was included as part of the bipartisan Highway bill conference report – HR 4348 – which is expected to be approved by both the House and Senate this week.
AWMA lobbied in favor of this RYO issue during our annual "AWMA Day on the Hill" event in May. In meetings with over 60 legislators, our members urged lawmakers to codify an Alcohol and Tobacco Trade and Tax Bureau (TTB) ruling that deemed proprietors of retail establishments that "rent" RYO machines to consumers to be "manufacturers" of tobacco products and thus subject to enhanced regulatory requirements associated with being a manufacturer.
AWMA was joined by many others in the industry – including NACS and NATO – in supporting this effort to codify the TTB ruling. The passage of this RYO language will ensure much-needed market certainty and will promote a more level competitive playing field. In addition, this legislation ensures there will be no liability for such back taxes and does not address any increase in tobacco taxes.
The actual language adopted by the conference committee is below:
SEC. 100122. ROLL-YOUR-OWN CIGARETTE MACHINES.
(a) IN GENERAL.—Subsection (d) of section 5702 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new flush sentence:
''Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine. A person
who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.''
(b) EFFECTIVE DATE.—The amendment made by this section shall apply to articles removed after the date of the enactment of this Act
