Smoke shop entrepreneurs who thought they'd found a way around the city's exorbitant cigarette tax laws are learning that what they thought was a loophole is more like a noose. You might even say their dreams are going up in smoke (if you have no shame). City lawyers have been aggressively cracking down on smoke shops that sell discount "roll your own" cigarettes—customers buy loose tobacco, which is taxed at a much lower rate than cigarettes, then roll their own smokes using in-store machines. Six of these shops have already agreed to shut down in the face of legal action, and now two more are being targeted by the city and New York State.
NYC Corporation Counsel Michael A. Cardozo and Attorney General Eric T. Schneiderman yesterday announced a federal lawsuit against BB’s Corner at 8415 18th Avenue in Brooklyn, and Nitecap Entertainment, at 690 Gulf Avenue in Staten Island. Prosecutors say these businesses evade cigarette taxes "by providing customers with loose tobacco, tubes of cigarette paper, and access to machinery that instantly produces finished cigarettes for the customer onsite."
No one at BB's would comment, and Nitecap Entertainment simply hung up on us. But they've probably got their hands full running "The Cleanest Dirty Store in America"—in addition to roll your own smokes, Nitecap sells sex toys, and porn, and even uses porn star Ron Jeremy in several promotional videos, the Staten Island Advance reports. (Video below) BB’s Corner and Nitecap advertise “200 count cartons” of “smokes” for “$29.95 per carton," which is less than half of the amount of the taxes alone on a carton of cigarettes, prosecutors say.
"The City has successfully shut down all six of the illegal operations that were previously uncovered, and we are pleased that the State is joining our efforts to go after more smoke shops,” said Corporation Counsel Michael A. Cardozo in a statement. And AG Schneiderman chimed in, “The illegally low prices these businesses are charging for their store-made machine-rolled cigarettes have been shown time and again to encourage people to take up smoking and to discourage smokers from quitting." He also pointed out that New York State requires "all cigarettes sold in the state be fire-safe; these cigarettes are not."
