Signed by Governor Jared Polis

Vote Smart's Synopsis:

Vote to concur with senate amendments and pass a bill that increases incrementally the cigarette tax and the tobacco products tax.

Highlights:

• Establishes that a referendum will be held on November 3, 2020, that will ask voters to raise taxes on cigarettes and other nicotine products (Sec. 1).

• Establishes the following taxations on cigarettes (Sec. 3):

• 6 and one-half cents per cigarette bought between January 1, 2021, and July 1, 2024;

• 8 cents per cigarette bought between July 1, 2024, and July 1, 2027; and

• 10 cents per cigarette bought after July 1, 2027. 

• Establishes the following taxes on modified-risk tobacco products (Sec. 3):

• 3 and one-quarter cents per cigarette bought between January 1, 2021, and July 1, 2024;

• 4 cents per cigarette bought between July 1, 2024, and July 1, 2027; and

• 5 cents per cigarette bought after July 1, 2027.

• Establishes the Tobacco Tax Enforcement Cash Fund within the Treasury Department (Sec. 6). 

• Establishes that all money received and collected as part of the tax will be divided 15 percent to the general fund and 85 percent to the old-age pension fund (Sec. 8).

• Requires that cigarette must cost at least the following prices (Sec. 10):

• 7 dollars per package of 20 cigarettes and $70 per carton of 200 cigarettes and between January 1, 2021, and July 1, 2024; and

• 7 dollars and fifty cents per package of 20 cigarettes and $75 per carton of 200 cigarettes after July 1, 2024. 

• Establishes the following civil penalties for anyone failing to meet these sale requirements within a 5-year period (Sec. 10):

• $500 for the first offense;

• $1,000 for the second offense; and

• $1,500 for the third offense.

• Establishes the following taxes on tobacco products (Sec. 12):

• 20 percent of the manufacturer’s list price before January 1, 2021;

• 30 percent of the manufacturer’s list price between January 1, 2021, and July 1, 2024;

• 36 percent of the manufacturer’s list price between July 1, 2024, and July 1, 2027; and

• 42 percent of the manufacturer’s list price after July 1, 2027.

• Establishes the following taxes on modified risk tobacco products (Sec. 12):

• 15 percent of the manufacturer’s list price between January 1, 2021, and July 1, 2024;

• 18 percent of the manufacturer’s list price between July 1, 2024, and July 1, 2027; and

• 21 percent of the manufacturer’s list price after July 1, 2027.

• Appropriates tax money to rural public school districts for the next 3 school years under the following margins (Sec. 20):

• 55 percent for the applicable distribution year to large rural districts; and

• 45 percent for the applicable distribution year to small rural districts.

• Appropriates the following funds to rural public school districts (Sec. 20):

• $25 million for the 2020-21 school year;

• $30 million for the 2021-22 school year; and

• $35 million for the 2022-23 school year.

• Establishes that the following taxes become effective after the governor signs a proclamation finalizing the election’s approval, or on January 1, 2021, whichever is later (Sec. 27).

Full Bill Text

Vote Smart's Synopsis:

Vote to amend and pass a bill that increases incrementally the cigarette tax and the tobacco products tax.

Highlights:

• Establishes that a referendum will be held on November 3, 2020, that will ask voters to raise taxes on cigarettes and other nicotine products (Sec. 1).

• Establishes the following taxations on cigarettes (Sec. 3):

• 6 and one-half cents per cigarette bought between January 1, 2021, and July 1, 2024;

• 8 cents per cigarette bought between July 1, 2024, and July 1, 2027; and

• 10 cents per cigarette bought after July 1, 2027. 

• Establishes the following taxes on modified-risk tobacco products (Sec. 3):

• 3 and one-quarter cents per cigarette bought between January 1, 2021, and July 1, 2024;

• 4 cents per cigarette bought between July 1, 2024, and July 1, 2027; and

• 5 cents per cigarette bought after July 1, 2027.

• Establishes the Tobacco Tax Enforcement Cash Fund within the Treasury Department (Sec. 6). 

• Establishes that all money received and collected as part of the tax will be divided 15 percent to the general fund and 85 percent to the old-age pension fund (Sec. 8).

• Requires that cigarette must cost at least the following prices (Sec. 10):

• 7 dollars per package of 20 cigarettes and $70 per carton of 200 cigarettes and between January 1, 2021, and July 1, 2024; and

• 7 dollars and fifty cents per package of 20 cigarettes and $75 per carton of 200 cigarettes after July 1, 2024. 

• Establishes the following civil penalties for anyone failing to meet these sale requirements within a 5-year period (Sec. 10):

• $500 for the first offense;

• $1,000 for the second offense; and

• $1,500 for the third offense.

• Establishes the following taxes on tobacco products (Sec. 12):

• 20 percent of the manufacturer’s list price before January 1, 2021;

• 30 percent of the manufacturer’s list price between January 1, 2021, and July 1, 2024;

• 36 percent of the manufacturer’s list price between July 1, 2024, and July 1, 2027; and

• 42 percent of the manufacturer’s list price after July 1, 2027.

• Establishes the following taxes on modified risk tobacco products (Sec. 12):

• 15 percent of the manufacturer’s list price between January 1, 2021, and July 1, 2024;

• 18 percent of the manufacturer’s list price between July 1, 2024, and July 1, 2027; and

• 21 percent of the manufacturer’s list price after July 1, 2027.

• Appropriates tax money to rural public school districts for the next 3 school years under the following margins (Sec. 20):

• 55 percent for the applicable distribution year to large rural districts; and

• 45 percent for the applicable distribution year to small rural districts.

• Appropriates the following funds to rural public school districts (Sec. 20):

• $25 million for the 2020-21 school year;

• $30 million for the 2021-22 school year; and

• $35 million for the 2022-23 school year.

• Establishes that the following taxes become effective after the governor signs a proclamation finalizing the election’s approval, or on January 1, 2021, whichever is later (Sec. 27).

Full Bill Text