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The Washington Post reported this week that the U.S. Senate has approved language that would classify tobacco shops and convenience stores that offer roll-your-own (RYO) cigarette machines as manufacturers.

Slapping the label of manufacturer on these RYO stores would subject them to a series of federal and state regulations that would in all probability put an end to the RYO machines by making them too expensive to license and operate.

The language was tucked into an amendment to the $109 billion federal highway bill that was written to provide aid for rural schools and was approved on a bipartisan vote. The RYO language was contained in a single paragraph in the Secure Rural Schools amendment.

The Post reported that the sponsor of the rural school amendment, Sen. Max Baucus (D-Mont.), said the $97 million the RYO provision would generate could help support the $346 million program to support schools and road projects.

Earlier this month, DOR's blog reported that RYO machines were coming under intense scrutiny in many state houses due to lost tax revenue, given that RYO cigarettes are taxed at a fraction of those commercially packaged. In Massachusetts, Gov. Deval Patrick has proposed increasing the excise tax on loose tobacco to approximate the $2.51 excise tax now paid on a pack of cigarettes, as well as to institute an annual license fee of $25,000 for each RYO machine. 

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