News Analysis: Why Are Rolling Papers Taxed As Cigarettes?

Rhode Island is unusual among the states for a tax policy that treats rolling papers as equivalent to cigarettes, such that a package of 20 sheets of rolling paper is taxed as if it was a pack of 20 ready-made cigarettes, the current excise tax for which is $3.75. Sales tax of 7% is then imposed on the total retail price including the excise tax, another $0.2625 attributable to the excise tax alone, bringing the combined excise and sales tax on the excise tax to a few cents over $4.00.

The statutory language adopted by the General Assembly is explicit and leaves no room for interpretation: “Whenever used in this chapter… ‘Cigarettes’ means and includes any cigarettes suitable for smoking in cigarette form, and each sheet of cigarette rolling paper” (§44-20-1(2)). Like ready-made cigarettes, to be sold legally rolling papers must carry a tax stamp, the Division of Taxation confirmed to Motif.

Consumers are accustomed to paying in the range of $8.00 to $10.00 for a pack of 20 ready-made cigarettes, and RI for decades has had among the highest taxes in the nation on cigarettes. The excise tax on a pack of cigarettes is a factor of ten lower, about 30 cents, in a state such as Virginia. Beyond revenue considerations, high taxes in RI are partly to discourage smoking anything, especially tobacco which is universally known to be extremely harmful. “The Department of Health considers both the sale of tobacco and the sale of rolling papers of concern. There are many different types of smoking material and devices (hookahs, pipes, vaporizers, rolling papers, etc.). We don’t consider any one of greater concern than the others. Our consistent goal is to reduce rates of use,” spokesman Joseph Wendelken told Motif.

Compared to ready-made cigarettes, the base price of a package of rolling papers is far less. Even a few hundred feet over the state line into Massachusetts, it is easy to find a package of 20 sheets of rolling papers for sale at gas stations and convenience stores, typically for between 75 and 99 cents. The practical effect is that it is impossible to find any legal seller of rolling papers in RI because the minimum price for a 20-sheet package would end up in the range of $5.00, of which at least $4.00 would be tax. Numerous retailers said that this works a de facto prohibition against the sale of rolling papers in RI. When asked by Motif whether this was a policy goal, Wendelken answered, “The Department of Health aims to reduce rates of tobacco use in Rhode Island, so if you are asking whether we consider it a good thing that fewer retailers are selling material to smoke tobacco, my answer is yes.”

It seems unknowable why the RI legislature decided to tax rolling papers as if they were ready-made cigarettes, the reasoning now lost to history in a chain of enactments going back to 1939. One possible explanation is that the motivation was purely revenue, to stop people from “cheating” the tax law by buying loose tobacco and rolling their own cigarettes, although the tax revenue now derived from rolling papers must be close to zero given that no one in the state sells them. (The Division of Taxation was unable to answer by press time when asked how much, if any, tax revenue is attributable to rolling papers as distinct from ready-made cigarettes.)

No one would seriously claim that any but a small fraction of rolling papers are sold to buyers planning to use them with tobacco. They can be used for legal substances such as tobacco or illegal substances such as cannabis, although state law definition of “drug paraphernalia” specifically includes “Wide rolling papers which are designed for drug use” (§21-28.5-1(a)(11)(xiv)). The “manufacture or delivery of drug paraphernalia” is a criminal offense in RI, carrying a fine up to $5,000 and a jail term of up to two years (§21-28.5-2), and the definition of “drug paraphernalia” is quite expansive (§21-28.5-1), taking into account the intent of the seller and the circumstances of sale.

Ironically, many cannabis users report that the unavailability of simple white rolling papers in RI causes a common practice of buying cheap cigars in order to cut them apart and reuse them as containers. Because cigars by definition are rolled from tobacco leaves and contain tobacco, this makes it hard for a cannabis user to avoid smoking tobacco. Since the 1980s, cannabis rolled into the tobacco leaf wrapper from a cigar has been commonly called a “blunt,” the term derived from the notoriously cheap Phillies Blunt brand of cigar. (In Edward Hopper’s iconic 1942 painting “Nighthawks” showing people seated at the counter of a late-night diner, there is a prominent sign advertising Phillies cigars for “only 5¢.”) If instead of discarding the tobacco from inside the rolled cigar the user mixes it with cannabis, this is commonly called (in the United States, anyway) a “spliff.” It would not be surprising to find that that most sales of cheap cigars, widely available in RI, are for reuse with cannabis.

Even accepting the argument that it is desirable to employ tax policy to discourage tobacco use, it is difficult to see how that is accomplished in the case of rolling papers, the vast majority of which would not be used for tobacco. As taxes on cigarettes increased from cents to dollars, rolling papers got caught up in a tax situation that, without any conscious intent, turned into prohibition.