Bill to Lower Colorado’s Cigar Tax Dies in Committee

A bill seeking to lower the cigar tax rate in Colorado died in the state’s Senate Finance Committee last week by a 4-3 vote.

SB 102, which was sponsored by Senator Tom Sullivan, D-Arapahoe and Douglas, sought to bring the tax rate down to 20 percent of the wholesale price. Currently, it sits at 50%, and under a recent referendum, will rise to 56% and then to 62%. In terms of how that would affect consumers, a cigar with an MSRP of $9.50 that currently costs $14.25 would drop to $11.20, before any sales taxes are added.

“I was pleased to present SB 102 for consideration this year, calling for a tax limit of 20% on premium cigars,” Sullivan said in a press release. “The bill provides a legislative definition, and recognizes the difference with other tobacco products. It’s about helping Colorado small businesses and making the state competitive. Although we came up up a couple of votes short, I am committed to reintroducing the legislation, and making the case for a better tax policy in future sessions.”

“The hearing was the beginning for seeking tax relief for Colorado small businesses and consumers who have a passion for premium cigars,” said Jimmy Hargrove, vice president of the Colorado Premium Cigar and Pipe Association and owner of Tobacco Leaf in Lakewood, Colo., said in a press release. “On behalf of the Colorado Premium Cigar and Pipe Association we want to express our sincere appreciation to Senator Tom Sullivan for sponsoring S.B. 102 calling for tax relief for those that sell and enjoy premium cigars. We also appreciate the support of the Premium Cigar Association during this process. Together, we will work to get our message heard.”

Glynn Loope, director of state advocacy for the Premium Cigar Association, added that it is clear that Colorado is in need of tax relief and reform as it would benefit both small businesses and consumers.

“They are surrounded by states with lower rates,” Loope said in a press release. “Senator Sullivan not only made the case for tax relief as a legislator, but attested to the need personally as a patron of Colorado’s cigar shops. In addition, we addressed the arguments against the bill from the public health perspective, as one senator on the committee called it “laughable” to equate premium cigars to other products. Thanks to Senator Sullivan’s commitment, this is just the beginning.”