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What you should know about the product identified as "tobacco leaf"

April 1, 2009: the United States Congress increased the federal taxes on cigarette and tobacco products. The tax increase on roll-your-own tobacco was especially significant.

Since that time, the Oregon Department of Revenue has been made aware of a product generally identified as tobacco leaf. In many instances, this product is being marketed using a claim that "no tax is due" on the product. The department disagrees with that claim.

Oregon Revised Statute (ORS) 323.505 imposes a tax on the distribution of tobacco products. ORS 323.500(14) defines "tobacco products" broadly to include any form of tobacco other than cigarettes that is suitable for chewing or smoking. Under this definition, this product is subject to Oregon's tobacco tax. In addition, to the extent the tobacco leaf is likely to be purchased by consumers for making cigarettes, it is roll-your-own under ORS 323.800(4)(b). As such, the product is subject to the certification requirements and sales restrictions contained in ORS 180.400 to 180.455. In other words, distributors may not purchase a tobacco leaf from a manufacturer unless it is listed in the Oregon Directory of Compliant Tobacco Product Manufacturers and Brands.

If you have purchased and/or sold any of this product, be sure to include it in your tax report when filing with our department. Should you have further questions regarding this product, please see our contact information.