CONCORD, N.H. ?" A case involving a cigarette rolling machine has made it to the New Hampshire Supreme Court, the Associated Press reports. North of the Border Tobacco has a machine that rolls 200 cigarettes in 10 minutes, which customers can use after purchasing loose tobacco and rolling tubes from the company.

New Hampshire argued that the company should be paying into the national fund that assists states with Medicaid costs relating to tobacco-caused illnesses because customers leave with cigarettes. North of the Border attorneys countered that state law says a cigarette is both the usual paper-wrapped stick and a weight by roll-your-own tobacco, even unwrapped.

"What goes into that machine is a cigarette, and what comes out is a cigarette," said North of the Border lawyer Jeffrey Burd. "Once it's a cigarette it can't be manufactured into a cigarette."

If the judges agree with the state, North of the Border will have to put $5.33 per carton of cigarettes into escrow for the fund, which exempted pipe tobacco. That exemption further clouds the issue in this case.

In 2009, the federal government hiked excise taxes from $1.09 per pound to $24.78 per pound on roll-your-own tobacco. This led to some vendors to substitute tobacco labeled for pipe?"with only a $2.83 per pound tax?"as cigarette tobacco.

A judge in the Superior Court sided with the state that pipe tobacco should not be used in cigarette rolling machines and two years ago ordered North of the Border to cease selling pipe tobacco for the machines. The company appealed the ruling to the state??s Supreme Court.