The latest in a series of planned increases to Colorado’s tobacco tax went into effect today, as the tax rate jumped from 50 percent of the wholesale price to 56 percent.

In real-world terms, for a cigar with an MSRP of $9.50, the price at the register goes from $14.25 to $14.82 by halfwheel estimates and before any additional sales taxes are added.

The increases were approved by 67.6 percent of those who voted in a ballot proposition during the November 2020 election. At the time of the election, the state’s tobacco tax rate had been 40 percent of the wholesale price of a cigar, but the proposition caused it to increase by 50 percent on Jan. 1, 2021. Another increase will go into effect on July 1, 2027, when the rate increases to 62 percent of the wholesale price, bringing that $9.50 cigar to $15.39 by halfwheel estimates.

Colorado now has the fourth-highest tobacco tax in the country, trailing Utah, Alaska, and New York. Prior to today, California had been the fourth-highest, but its tax rate decreased from 56.32 percent of the wholesale cost to 52.92 percent as part of the state’s annual tobacco tax equalization.

Colorado’s Proposition EE also included language that would prevent residents from saving some money by shopping online, as it requires out-of-state sellers to charge Colorado’s tax rate.

Several other tobacco and tobacco-related products saw their tax rates increase as well. The tax on cigarettes went from $1.94 per pack to $2.24, and there is now a minimum price of $7.50 per pack. E-cigarettes, which had been untaxed prior to the passage of the proposition, are now taxed at the same rate as cigars, meaning the tax on them also increased from 50 percent to 56 percent.

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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, the G-League's Valley Suns, and previously the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for Major League Baseball, 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.