WGRZ reports that the popularity of pipe tobacco cigarettes started in April 2009, when the federal government increased the excise tax on a pack of cigarettes from 39 cents to $1.01. The tax also jumped for tobacco used in roll-your-own cigarettes, and is now $24.78 per pound. The tax for pipe tobacco is $2.83 per pound.
Many smoke shops are now installing machines that make the equivalent of a carton of cigarettes in about 10 minutes.
According to the news report, pipe tobacco shipments almost doubled between 2009 and 2010, from 12.9 million pounds to 25.1 million pounds. During that same period, shipments of non-pipe tobacco used in roll-your-own cigarettes plummeted from 12.2 million pounds to 6.4 million pounds. Shipments of individual cigarettes decreased from 318 billion to 300.5 billion during that year.
Because small cigars are also taxed at a lower rate, some manufacturers have started to change their cigarettes so they can be classified as small cigars.
These trends have captured the attention of several legislators, health groups and even cigarette manufacturers who want to equalize the excise tax rate.