The results are in: Coloradans have voted to increase taxes on cigarettes and other nicotine products.
Currently, cigarette taxes in Colorado are relatively low; they’re subject to the 2.9% state sales tax, a 4.2¢-per-cigarette (84¢-per-20-pack) tax, and local cigarette taxes in some parts of the state. There’s also a federal excise tax on cigarettes, of $1.01 per pack. Colorado doesn’t currently tax nicotine products.
Earlier this year, Governor Jared Polis signed legislation that would increase the tax on products containing nicotine. Yet for the changes created by HB20-1427 to take effect, they needed to be approved by a vote of the people.
On November 3, 2020, nearly 70% of Coloradans voted to:
- Gradually increase the per-cigarette tax to:
- 6.5 cents on January 1, 2021
- 8 cents on July 1, 2024
- 10 cents on July 1, 2027
- Increase the statutory tobacco products tax from 20% of the manufacturer's list price (MLP) to:
- 30% of MLP on January 1, 2021
- 36% of MLP on July 1, 2024
- 42% of MLP on July 1, 2027
- Establish a new tax on nicotine products as follows:
- 50% of MLP on January 1, 2021
- 56% of MLP on July 1, 2024
- 62% of MLP July 1, 2027
- Establish separate tax rates (50% of the statutory tax rate) for “modified risk” tobacco products
- Establish a minimum tax for moist snuff tobacco products:
- $1.48 per 1.2-ounce can on January 1, 2021
- $1.84 per 1.2-ounce can on July 1, 2024
- $2.26 per 1.2-ounce can on July 1, 2027
- Create an inventory tax on all stamped cigarettes and unaffixed stamps in a wholesaler or wholesale subcontractor's possession or control at the time of a tax increase occurring after January 1, 2022
With these changes, the minimum price for a 20-pack of cigarettes will be $7 as of January 1, 2021, and $7.50 as of July 1, 2024.
