Bill tackles tobacco smuggling, counterfeiting, roll-your-own shops

Feb 12, 2012

A Michigan lawmaker says counterfeit tobacco products and smuggling have cost the state up to $1 billion over the past five years. The state Senate is now considering a bill that would require a digital tax stamp and stronger tobacco enforcement.

State Sen. Roger Kahn says his bill tackles more than illegal activity.

It would also require small tobacco shops that provide so-called "roll-your-own" cigarette machines for customers' use to pay a state tax of $2 per pack.

Some tobacco shop owners oppose the bill because it would label them as cigarette manufacturers.

Kahn says that's exactly what they are.

"They pay some money in bulk tobacco, and then they have people who turn the crank on the machine, or they plug it into the wall, and they generate a carton of cigarettes," Kahn says. "And every carton that they send out the door costs the state of Michigan $20."

Kahn also says tobacco settlement money is being withheld from the state because of inadequate smuggling and counterfeit enforcement.

Michigan received compensation from the tobacco industry in a class-action lawsuit to reimburse smoking-related Medicaid costs.