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April 4, 2012 at 4:00 PM

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Roll-your-own tobacco shops have retailers fuming

We support current proposal

Editor, The Times:

The April 2 article regarding roll-your-own tobacco shops implies that retailers are fuming. [“Roll-your-own cigarettes fire up tax debate,” NWMonday, April 2.]

The retailers, which we collectively represent, are not “fuming” about the current proposal being considered by the Legislature. We support it! The only “retailers” who do not support it are the new outlets for cheap cigarettes that have taken advantage of a “tax loophole.”

Legitimate retailers such as grocery stores, convenience stores and gas stations currently sell cigarettes that have tax stamps and collect the proper state and federal taxes. For many of the convenience stores, cigarette sales can be upward of 30 percent of their total annual revenue.

While these stores are losing sales to RYO locations, Washington state is also losing valuable revenue at a time when they can least afford it. According to official legislative fiscal notes, the estimated revenue loss to the state ranges from $12 million to $20 million per year based on 65 RYO locations currently in Washington state. The actual amount is likely higher since these stores are “popping up” at an alarming rate.

When the federal government raised tobacco taxes in 2009, tobacco companies began producing loose-leaf cigarette tobacco and mislabeled their product as “pipe tobacco” in order to avoid the higher federal tax. Companies like RYO Filling Station sprung up to take advantage of this 10-to-1 tax differential.

We would encourage the Washington state Legislature to pass House Bill 2565 in order to create a level playing field for legitimate retailers and provide the state with much-needed revenue.

— Jan Teague, president, Washington Retail Association

— Jeannie Lee, executive director, Korean-American Grocers of Washington

— Joe Gilliam, president, Northwest Grocery Association

— T.K. Bentler, executive director, Washington Association of Neighborhood Stores

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Ah yes, a letter from a group of unbiased citizens. Uh... wait... Being realistic... MORE
So, the state is missing out on tax revenue from a habit that they say is BAD for you... MORE
A few million bucks from this special-interest legislation. So, for about the fifth... MORE

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