Tobacco products, including premium cigars, will be getting more expensive in Colorado as voters have approved Proposition EE, with 68.6 percent of voters in favor of the increase as of 8:47 pm local time. The Denver Post called the result on Tuesday evening with 79 percent of votes counted.

It will be a gradual increase spread out over the next several years; currently, premium cigars are taxed at 40 percent of the wholesale price. With the passage of the proposition, that will increase to 50 percent beginning on Jan. 1, 2021, then to 56 percent in on July 1, 2024, and finally 62 percent of the wholesale price on July 1, 2027.

As for what that means at the register, a cigar with an MSRP of $9.50 currently costs approximately $13.30 under the current rate and before any additional sales taxes. With passage of Proposition EE, that will go up to $14.25 starting in 2021, then to $14.82 in 2024 and finally $15.39 when all the increases have been enacted, by halfwheel estimates.

Other tobacco products will also see their tax rates increase. Cigarettes will first get a new minimum price requirement of $7 per pack. The tax will go from 84 cents per pack to $1.94 as of Jan. 1, 2021, then to $2.24 per pack in 2024, and finally $2.64 in 2027. Additionally, the minimum price for a pack will increase to $7.50 on July 1, 2024, and impose an inventory tax that corresponds to each tax increase beginning on Jan. 1, 2022.

For those who use non-tobacco nicotine products, such as e-cigarettes and vaping devices, they will now see a tax imposed on those products, which are currently untaxed in the state. That will change as of Jan. 1, 2021, when they begin to be taxed at a rate of 50 percent of the wholesale price. That rate will then increase at the same rates and schedule as applied to premium cigars. Licenses would also be required to sell such products in the state.

Moist snuff products will also be subject to a minimum tax for that would be based on a combined minimum tax between the statutory tobacco tax and the tax imposed under Amendment 35. The bill also includes language that would lower the tax rate on a certain product by 50 percent if it were to get a Modified Risk Tobacco Product (MRTP) designation from the Food and Drug Administration (FDA).

To further the financial hit that tobacco users will take, the proposition contains language that allows cities, counties or other home rule municipalities from tacking on any additional taxes to tobacco products should they pass the needed legislation.

Finally, when it comes to transactions for tobacco products conducted online or over the phone from businesses out of state, the new law requires those entities, defined as delivery sellers, to impose the tax rate at the time of sale.

Correction — this article had the incorrect date for the 2024 and 2027 increases; they were listed as Jan. 1 of those years, when they are actually July 1 of those years. The article has been corrected, and we regret the error.

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Patrick Lagreid

I strive to capture the essence of a cigar and the people behind them in my work – every cigar you light up is the culmination of the work of countless people and often represents generations of struggle and stories. For me, it’s about so much more than the cigar – it’s about the story behind it, the experience of enjoying the work of artisans and the way that a good cigar can bring people together. In addition to my work with halfwheel, I’m the public address announcer for the Colorado Rockies and Arizona Diamondbacks during spring training, as well as for the Salt River Rafters of the Arizona Fall League, the WNBA's Phoenix Mercury and previously the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for MLB.com, plus I'm a voice over artist. Prior to joining halfwheel, I covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.