1. I own a roll-your-own store. What does this legislation mean to me?
Retailers who provide customers with access to a commercial cigarette-making machine must have all three of the following licenses:
- Cigarette Retailer
- Tobacco Products Retailer
- Commercial Cigarette Making Machine. This is a new license created by this legislation. You cannot obtain this license unless you have a cigarette retailer license. You can apply for this new license beginning June 1, 2012.
The legislation requires you to:
- Provide your customers with cigarette tubes/papers in increments of 20.
- Provide your customers with a container to use to carry the cigarettes out of the store.
Purchase cigarette tax stamps and attach the appropriate number of those stamps to the container you provide.
2. How much tax is applied to a pack (20) or a carton (200) of cigarettes?
There is $3.025 tax on 20 cigarettes; $30.25 on 200 cigarettes.
3. What do the stamps cost?
Cigarette retailers purchase stamps at face value minus:
- 5 cents per cigarette for compensation of the tax already paid on the tobacco.
- $6 dollars per thousand stamps for compensation for affixing the stamps.
4. How do I buy stamps?
You must be authorized to buy the cigarette stamps. The appropriate forms and additional information are available on the Business Licensing Service’s website at http://bls.dor.wa.gov/cigarettewholesaler.aspx.
5. How do I order stamps?
Once you are authorized to buy stamps, you will receive detailed ordering instructions from the Department. Stamps are ordered through a telephone ordering system, which can accept orders 24 hours a day. Deliveries will be made on business days (Monday–Friday) to your business location by armored car or UPS at no charge. In general, stamp orders are processed each business day at 11:00 am, and delivered the next business day. No stamp deliveries will be made on weekends and holidays. You should plan ahead to make sure you have the stamps you need to get through the weekends.
6. What is the minimum number of stamps I can buy?
There are two stamps to choose from: one for 20 cigarettes (“RYO 20”) and one for 200 cigarettes (“RYO 200”). They come in sheets of 150. The minimum number of RYO 20 stamps you can order is 600 stamps, which costs $1,211.40. The minimum number of RYO 200 stamps you can order is 150 stamps, which costs $3,036.60.
7. How do I attach the stamps to the product?
The stamps are self-adhesive. Just apply the appropriate number to the container you provide for the customer to take the cigarettes out of the store.
8. What qualifies as a “container?” Can I use zipped plastic bags?
The legislation simply says “container”. You can use whatever sort of container you choose. However, you may only use a stamped container one time. It is a gross misdemeanor to use a stamped container more than once.
9. My customers like to bring in their own containers? Is that okay?
No. The legislation requires the retailer to provide a container to the customer. The customers must carry the cigarettes out of the store in the container you provide.
10. How will you know if I am using the stamps on every purchase?
The legislation requires the commercial cigarette-making machine to have a secure meter that tracks the number of cigarettes made. The retailer is required to file a monthly Roll-Your-Own Cigarette Reporting Form with the Department that tells how many cigarettes were made. The Department will reconcile the cigarettes made and the stamps purchased.
11. Occasionally, our machine breaks down and it can require us to make up to 600 cigarettes to repair it. Do we have to pay cigarette tax on those products?
The monthly report will have an entry for adjustments to your meter counts for machine malfunction, repairs, and maintenance. Damaged cigarette tubes and cigarettes produced but not sold should be preserved for audit verification by the Department.
12. How can I get a tobacco product included on the Attorney General’s list of certified products?
The manufacturer of the tobacco must apply to the Attorney General’s Office. Contact the Attorney General’s Office at (360) 753-2439 for additional information.
13. What if I have more questions?
For general information, call the Department of Revenue at 1-800-647-7706. For assistance with RYO stamps, call (360) 534-1503.