Roll your own cigarette store find loophole to open back up - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Roll your own cigarette store find loophole to open back up

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KENNEWICK, Wash. -- NBC Right Now has discovered a new development with roll your own cigarette stores. While stores have been closing down nationwide after lawmakers changed how the businesses are taxed, the owner of half priced smokes says he and other roll your own cigarette store owners across the country have joined forces and are working with lawyers to fight the recent state and federal laws.

Gary Alexander, who owns a store in Tacoma and Kennewick says these new laws are a victory for big tobacco companies smoking out the small businesses. "If you brew your own beer, they don't tax you right now like you're a brewery. If you make your own wine they don't tax you like you're a winery. So if you roll your own cigarettes, should you be taxed like you're a manufacturer?," he asks.

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Law makers in Olympia and Washington DC feel that they should be taxed like manufacturers. Rep. Maureen Walsh, for the 16th Legislative District was a co-sponsor on the bill that was passed into law in April. "Whether you roll your own or whether you buy them in a pack already produced for you, I still think you should be subjected to the tax because we pay an inordinate amount of our healthcare costs to care for people who have health issues based on their smoking," says Walsh.

In July, President Obama signed a part of the Highway Transportation Bill that also classified Roll Your Own Cigarette retail venues as manufacturers, changing their taxes. So Alexander and other owners across the country found a loophole with the help of lawyers, changing the store fronts from retail locations to Private Member Only Clubs.

"Machines will run on a monthly membership. It's currently $5 a month to run them all you want and doing it this way, you're free from government regulation," says Alexander.

Walsh says she expects lawmakers to review this issue in January at the start of session. "I guess if you can find a loophole in any law, then it is the fault of the legislature that passed that law," she says.

Alexander however says he is prepared to go all the way. He says the loop hole is only fair since the original law was created with a loophole as well, not allowing their stores to even get a manufacturer's license. "When they look at us and look at the operation, they say you guys are not a cigarette manufacturer by our standards and we have no classification for you and we won't give you a permit.," says Alexander.

He's so confident in the future, Half Priced Smokes be opening another "private club" on West Court Street in Pasco in about two weeks.

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