The state and New York City have settled a federal lawsuit they brought against two roll-your-own cigarette shops in New York City for not paying cigarette taxes, Attorney General Eric Schneiderman announced today. BB’s Corner in Brooklyn and Nitecap Entertainment in Staten Island have agreed to pay a penalty totaling $15,000 to both the state and city.
Roll-your-own shops sell loose tobacco and cigarette paper tubes, which customers then load into a machine that spits out dozens of cigarettes. They sell for as little as about $30 per carton. Owners have maintained that they are not subject to taxes on manufactured cigarettes because they sell the ingredients but don’t manufacture the products.
The state and New York City challenged the New York stores on that argument and also charged that the cigarettes were not fire safe, as required under state law.
“No one is above the law when it comes to paying taxes. These cigarette shops thought they could skirt the law by pretending not to sell cigarettes, when in fact that’s exactly what they were doing,” Schneiderman said in a statement. “It is well-established that cheap cigarettes attract young smokers, and that smokers who pick up the habit when they are young have a far more difficult time quitting later on. Today’s announcement sends a clear message to those who try to evade the rules: my office will aggressively enforce the laws of this state and protect consumers.”
There are several roll-your-own shops in Rockland County. There was one in New Rochelle, but it shut down several months ago.
(Photo credit: U.S. Alcohol and Tobacco Tax and Trade Bureau.)