Last week, the Sixth Circuit Court of Appeals overturned an injunction preventing the Alcohol and Tobacco Tax and Trade Bureau (TTB) from treating retailers with RYO machines as tobacco manufacturers. By lifting the trial court’s injunction, the court paved the way for TTB to begin enforcing federal tax and regulatory requirements against RYO retailers, thereby creating a level playing field in the retail tobacco market.
Language supported by NACS that was included in the Highway Bill, which was signed into law by President Obama, has rendered this case moot, the court ruled.
Recognizing the inevitability of the Sixth Circuit’s ruling, representatives of the RYO machine industry filed a lawsuit in court last week arguing that the language in the Highway Bill classifying RYO retailers as tobacco manufacturers is unconstitutional, citing the Equal Protection Clause and the Takings Clause.
These claims have little legal merit, and the recent lawsuit is a transparent attempt to delay the inevitable enforcement of federal law against RYO retailers. TTB is currently in settlement negotiations with the RYO machine industry, and it remains unclear when TTB will begin enforcing the new federal law against RYO retailers. (NACS: www.nacsonline.com)
