Senate Bill 25-056, introduced in the Colorado General Assembly, aimed to redefine "premium cigars" and reduce their excise tax rate. Key aspects of the bill included:
Definition of Premium Cigar: The bill sought to define a premium cigar as one that is hand-rolled, has a wrapper made of whole tobacco leaves, and lacks a filter or mouthpiece.
Reduction of Excise Tax Rate: It proposed lowering the statutory excise tax on premium cigars from the existing 36% of the manufacturer's list price (MLP) to 20% of the MLP, effective July 1, 2025. This change aimed to roll back tax increases implemented since 2005.
Constitutional Tax Unaffected: The bill did not alter the additional 20% tax on premium cigars mandated by the state constitution.
Despite these proposals, the Senate Finance Committee voted on February 4, 2025, to postpone the bill indefinitely, effectively halting its progress.
The bill was sponsored by Senator Tom Sullivan, representing parts of Arapahoe and Douglas counties.
This legislative effort reflects ongoing discussions about taxation levels on premium cigars within Colorado.
Summary
Effective July 1, 2025, the bill defines premium cigar and
reduces the statutory rate of excise taxation of this particular tobacco product from the current rates for all non-cigarette tobacco products other than moist snuff of 36% of the manufacturer's list price (MLP) from July 1, 2024, through June 30, 2027, and 42% of the MLP on and after July 1, 2027, to 20% of the MLP, effectively rolling back the increases in the statutory taxation rate for such tobacco products since 2005. The bill does not affect taxation of premium cigars under the state constitution, which imposes an additional 20% tax.
