Five hours of testimony and argument in a Dane County courtroom Wednesday were not enough to resolve whether cigarettes produced in tobacco outlets with roll-your-own machines are subject to state excise tax.
Retailers sued the state Department of Revenue which temporarily shut down the machines in September after claiming that retailers were manufacturing and distributing cigarettes without proper permits.
Dane County Circuit Judge Juan Colas lifted the ban last month and lawyers returned to court Wednesday to argue whether state statutes on cigarette manufacturing apply to about 50 roll-your-own machines in the state that are capable of producing 200 cigarettes in about 10 minutes.
Assistant Attorney General Christopher Blythe said the manufacturing statute clearly defines the manufacturer as “any person who manufactures cigarettes for the purpose of sale and sale means … the … scheme or transaction whereby cigarettes may be obtained.”
Blythe said that “although the consumer presses the button (on the machine), the machine is owned by the retailer.”
William Hurd, attorney for the retailers, argued that the customer is the manufacturer because he buys loose tobacco and empty cigarette tubes and operates the machine that fills the tubes.
“The retailer may own the machine but that doesn’t make him the manufacturer,” said Hurd, who added that would be as wrong as saying a person who rents a fishing pole to someone who catches a fish must count the catch against the pole owner’s daily bag limit.
Robert Petersen, owner of Rib Mountain Tobacco and Liquor and the lead plaintiff in the suit, said a ruling is very important to his and similar businesses across the state.
“Tobacco products are a big portion of our business … and the (roll-your-own) niche is a growing part of our business. We’ve had over 8,000 people sign a petition wanting to keep these machines in the state because it’s a way for them to save money,” he said.
Colas didn’t say when he would issue a decision.
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