Two State Courts Rule RYO Retailers Are Not Manufacturers

HARTFORD, Conn. & MADISON, Wis. – The state courts of Connecticut and Wisconsin have rejected claims that retailers offering self-service, roll-your-own (RYO) tobacco machines should be classified as manufacturers of the product. If the courts had ruled in favor of that classification, retailers in those states, including convenience store operators, would have faced hefty regulatory and tax requirements.

In Connecticut, the Superior Court denied a state request for an injunction prohibiting a RYO retailers from offering self-service cigarette machines. In its ruling, the court said that simply offering a self-service RYO machine did not make a retailer a "manufacturer" of tobacco. The Connecticut court also determined that the state had not properly proven that it was being harmed due to lower tax revenues RYO machines were causing.

The Wisconsin ruling was similar. The Dane County Circuit Court entered a preliminary injunction prohibiting the State Department of Revenue from regulating RYO self-service machine retailers as "manufacturers" under state law. In addition, the Wisconsin court ruled that retailers would be irreparably harmed had it allowed the classification.

Phil Accordino, CEO of Girard, Ohio-based RYO Machine LLC, the maker of the RYO Filling Station self-serve machine, said both courts' decisions were huge for retailers.

"We are pleased that these two courts recognized the potential harm that these administrative actions would have had on jobs, small businesses and consumer choice," Accordino said. "…This issue is complex and the jobs and businesses that are put at risk are significant."

Both court rulings were issued Friday.