Judge Flicks Away Protest to Cigarette Tax Charges

MANHATTAN (CN) - A federal judge has rejected the rare legal defense of shops that sell roll-your-own cigarettes against New York City and state contraband laws.

New York charges the highest excise tax on cigarettes in the nation at $4.35 a pack, but taxes on loose tobacco are much less.

Trying to capitalize on this loophole, some shops that sell loose tobacco and rolling paper have brought in machines that let customers roll their own cigarettes before they leave the shop.

The city and state claim that the practice violates the Contraband Cigarette Trafficking Act, and most store owners are quick to settle the charges, U.S. District Judge Katherine Forrest explained.

But BB's Corner dba Roll-Your-Own of Brooklyn and Nitecap Entertainment dba Roll-Your-Own of Staten Island "have chosen to stand their ground and fight," she said.

The companies faced charges after the New York City Sheriff's Office bought four cartons of cigarettes from them in an investigation lasting several months.

"During each visit, a store clerk provided an investigator with loose tobacco as well as cigarette tubes and then instructed on the use of what is known as a 'roll your own' ('RYO') machines," according to the court. "On occasion, the store clerk would assist with the operation of the RYO machine."

The shops tried to counter the charges by claiming that they sell fewer cigarettes than the statutorily required 10,000.

But Forrest noted Monday that both companies have advertised the sale of cartons containing 200 cigarettes. Records that would emerge on the road to trial would also prove that the shops topped 10,000, she added.

"All that is missing are additional sales records that can be requested during discovery," the 15-page decision states.

Forrest said she made her decision in the public interest.

"Without a doubt, there is a strong public interest favoring the protection of public health and insuring both receipt of revenues likely properly due and owing as well as compliance with application tax law," the order states.

Various New York City officials lauded the decision.

"This marks an important step in our commitment to ensure that businesses uphold our public health measures directed at lowering smoking rates in New York City," Health Commissioner Thomas Farley said in a statement. "Cigarette taxes and other tobacco control policies have helped bring New York City's smoking rate to an all-time low of 14 percent."

New York City public health regulations and initiatives have been the subject of recent controversy with issues regarding secondhand smoke in public parks and the sales of large sodas.

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