Colorado § 39-28.5-102 - Tax levied.

§ 39-28.5-102. Tax levied.

(1) Except as set forth in subsection (3) of this section, there is levied a tax upon the sale, use, consumption, handling, or distribution of all tobacco products in this state, excluding modified risk tobacco products, at the rate of:

(a) Twenty percent of the manufacturer's list price of the tobacco products for the tax levied prior to January 1, 2021;

(b) Thirty percent of the manufacturer's list price of the tobacco products for the tax levied on and after January 1, 2021, but prior to July 1, 2024;

(c) Thirty-six percent of the manufacturer's list price of the tobacco products for the tax levied on and after July 1, 2024, but prior to July 1, 2027; and

(d) Forty-two percent of the manufacturer's list price of the tobacco products for the tax levied on and after July 1, 2027.

(2) There is levied a tax upon the sale, use, consumption, handling, or distribution of modified risk tobacco products in this state at the rate of:

(a) Fifteen percent of the manufacturer's list price of the modified risk tobacco products for the tax levied on and after January 1, 2021, but prior to July 1, 2024;

(b) Eighteen percent of the manufacturer's list price of the modified risk tobacco products for the tax levied on and after July 1, 2024, but prior to July 1, 2027; and

(c) Twenty-one percent of the manufacturer's list price of the modified risk tobacco products for the tax levied on and after July 1, 2027.

(3) (a) If the total of the tax imposed upon the sale, use, consumption, handling, or distribution of moist snuff under subsection (1) of this section and section 39-28.5-102.5 is less than the minimum moist snuff tax specified in subsection (3)(b) of this section, then the tax imposed upon the sale, use, consumption, handling, or distribution of moist snuff under this section is equal to the minimum moist snuff tax minus the tax imposed under section 39-28.5-102.5.

(b) (I) The minimum moist snuff tax is equal to:

(A) One dollar forty-eight cents for each one and two-tenth ounce container for the tax levied on and after January 1, 2021, but prior to July 1, 2024;

(B) One dollar eighty-four cents for each one and two-tenth ounce container for the tax levied on and after July 1, 2024, but prior to July 1, 2027; and

(C) Two dollars twenty-six cents for each one and two-tenth ounce container for the tax levied on and after July 1, 2027.

(II) The amount specified in subsection (3)(b)(I) of this section is proportionally increased for any container larger than one and two-tenths ounces.

(4) (a) The tax set forth in this section is collected by the department.

(b) In the case of the distributor, the tax set forth in this section is imposed at the time the distributor:

(I) Brings, or causes to be brought, into this state from without the state tobacco products for sale;

(II) Makes, manufactures, or fabricates tobacco products in this state for sale in this state;

(III) Ships or transports tobacco products to retailers in this state to be sold by those retailers; or

(IV) Makes a delivery sale.

(c) In the case a remote retail seller, the tax set forth in this section is imposed at the time the remote retail seller makes a remote retail sale.

(5) Repealed.

Source: L. 86: Entire article added, p. 1114, § 13, effective July 1. L. 2020: Entire section R&RE, (HB 20-1427), ch. 248, p. 1193, § 12, effective January 1, 2021. L. 2023: (5) added, (HB 23-1290), ch. 337, p. 2024, § 4, effective June 2; (4) amended, (HB 23-1015), ch. 142, p. 607, § 2, effective January 1, 2024.

Editor's note: (1) 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

(2) Subsection (5)(b) provided for the repeal of subsection (5), effective January 1, 2024, if a majority of the electors voting in the November 7, 2023, election vote "Yes/For" the ballot issue referred to the voters pursuant to § 39-28-502 (1), as that section existed prior to its repeal on July 1, 2024. (See L. 2023, p. 2024). The ballot issue specified in § 39-28-502 (1) was referred to the registered electors as Proposition II on November 7, 2023. It was approved by the voters and proclaimed by the Governor on December 15, 2023, with the following vote count:

FOR: 1,130,047

AGAINST: 543,405

Cross references: (1) For the tax on cigarettes, see article 28 of this title 39.

(2) For the legislative declaration in HB 23-1290, see section 1 of chapter 337, Session Laws of Colorado 2023.

ANNOTATION

The tax imposed by this section does not violate the commerce clause of the U.S. Constitution. A state tax impermissibly discriminates against interstate commerce if it is facially discriminatory, has a discriminatory purpose, or has the effect of unduly burdening interstate commerce. A tax is discriminatory if it taxes out-of-state transactions, entities, or products at a higher rate or if it exempts in-state transactions, entities, or products from an otherwise uniform tax. The tax imposed by this section is higher the later in the distribution network the event triggering the tax occurs, but this does not render the tax discriminatory. McLane W., Inc. v. Dept. of Rev., 126 P.3d 211 (Colo. App. 2005).