Colorado § 39-28.5-101 - Definitions.

§ 39-28.5-101. Definitions.

As used in this article 28.5, unless the context otherwise requires:

(1) "Consumer" means any person who has title to or possession of tobacco products for the person's own use or consumption in this state and not for resale.

(2) (a) "Delivery sale" means, except as provided in subsection (2)(b) of this section, the sale of tobacco products to a consumer in this state when:

(I) The consumer submits an order for the tobacco products to a delivery seller for sale by means other than an over-the-counter sale on the delivery seller's premises, including, but not limited to, telephone or other voice transmission, the mail or other delivery service, or the internet or other online service; and

(II) The tobacco products are delivered when the seller is not in the physical presence of the consumer when the consumer obtains possession of the tobacco products by use of a common carrier, private delivery service, mail, or any other means.

(b) "Delivery sale" does not include the sale of cigars or pipe tobacco.

(3) "Delivery seller" means a person located outside of this state who makes delivery sales.

(4) "Department" means the department of revenue.

(5) "Distributing subcontractor" means every person, firm, limited liability company, partnership, or corporation who purchases tobacco products from a distributor for resale to a retailer in this state.

(6) "Distributor" means every person who:

(a) First receives tobacco products in this state;

(b) Sells tobacco products in this state and is primarily liable for the tobacco products tax on such products;

(c) First sells or offers for sale in this state tobacco products imported into this state from any other state or country; or

(d) Is a delivery seller.

(7) (a) "Manufacturer's list price" means, except as provided in subsections (7)(b) and (7)(c) of this section, the invoice price for which a manufacturer or supplier sells a tobacco product to a distributor or remote retail seller exclusive of any discount or other reduction. In the case of cigars and pipe tobacco, "manufacturer's list price" is also known as the acquisition cost and is also exclusive of any discount or other reduction.

(b) For a delivery or remote retail seller, if determining the invoice price described in subsection (7)(a) of this section is impracticable, then "manufacturer's list price" means the average of the actual price paid, exclusive of any rebates or discounts applied, for the tobacco product's stock keeping unit during the preceding calendar year. The department may, by written notice to the delivery or remote retail seller, prospectively require a delivery or remote retail seller to calculate the tax on the invoice price if the department finds that the delivery or remote retail seller's use of the average price paid was for the purpose of avoiding tax.

(c) For a manufacturer who is also a delivery seller, a remote retail seller, or a retailer, and who sells tobacco products exclusively to consumers and not to suppliers or distributors, "manufacturer's list price" means the manufacturer's cost to manufacture the tobacco product, which includes the manufacturing overhead and the cost of all direct materials and direct labor used.

(8) "Modified risk tobacco product" means any tobacco product for which the secretary of the United States department of health and human services has issued an order authorizing the product to be commercially marketed as a modified risk tobacco product in accordance with 21 U.S.C. sec. 387k, or any successor section.

(9) "Moist snuff" means any finely cut, ground, or powdered tobacco that is not intended to be smoked but does not include any finely cut, ground, or powdered tobacco that is intended to be placed in the nasal cavity.

(10) (a) "Remote retail sale" means the sale of cigars or pipe tobacco to a consumer in this state when:

(I) The consumer submits an order for the cigars or pipe tobacco to a remote retail seller for sale by means other than an over-the-counter sale on the remote retail seller's premises, including, but not limited to, telephone or other voice transmission, the mail or other delivery service, or the internet or other online service; and

(II) The cigars or pipe tobacco are delivered to the consumer by use of a common carrier, private delivery service, mail, or any other means of remote delivery, or when the remote retail seller is not in the physical presence of the consumer when the consumer obtains possession of the cigars or pipe tobacco.

(b) "Remote retail sale" does not include the sale of tobacco products other than cigars or pipe tobacco.

(11) "Remote retail seller" means a person located outside of this state who makes remote retail sales.

(12) "Sale" means any transfer, exchange, or barter, in any manner or by any means whatsoever, for a consideration, including all sales made by any person. The term includes:

(a) A gift by a person engaged in the business of selling tobacco products, for advertising, as a means of evading the provisions of this article 28.5 or for any other purposes whatsoever;

(b) A delivery sale; and

(c) A remote retail sale.

(13) "Stock keeping unit" means the unique identifier assigned by the distributor or remote retail seller to various items in order to track inventory.

(14) "Tobacco products" means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or for smoking in a pipe or otherwise, or both for chewing and smoking, but does not include cigarettes that are taxed separately pursuant to article 28 of this title 39.

Source: L. 86: Entire article added, p. 1113, § 13, effective July 1. L. 2005: (1.5) added, p. 721, § 5, effective June 1. L. 2020: IP, (1), (2), and (4) amended and (1.2), (1.4), (3.3), and (3.7) added, (HB 20-1427), ch. 248, p. 1192, § 11, effective January 1, 2021. L. 2023: Entire section amended, (HB 23-1015), ch. 142, p. 605, § 1, effective January 1, 2024.

Editor's note: Section 27(2) of chapter 248 (HB 20-1427), Session Laws of Colorado 2020, provides that changes to this section take effect on the date of the governor's proclamation or January 1, 2021, whichever is later, only if, at the November 2020 statewide election, a majority of voters approve the ballot issue referred in accordance with section 39-28-401. The ballot issue, referred to the voters as proposition EE, was approved on November 3, 2020, and was proclaimed by the Governor on December 31, 2020. The vote count for the measure was as follows:

FOR: 2,134,608

AGAINST: 1,025,182

ANNOTATION

Catchall category of "tobacco products" includes products that are: (1) a kind or form of tobacco; and (2) prepared in a manner as to be suitable for chewing or for smoking in a pipe or otherwise. Colo. Dept. of Rev. v. Creager, 2017 CO 41M, 395 P.3d 741.

Blunt Wraps are tobacco products under the plain language of the definition because they are a form of tobacco that is suitable for smoking. Colo. Dept. of Rev. v. Creager, 2017 CO 41M, 395 P.3d 741.