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Small‑business owners press for premium‑cigar excise cap as public‑health groups oppose SB 86
Summary
Supporters said capping the excise tax on premium cigars would restore competitiveness for Colorado shops and recapture online sales; public‑health witnesses warned lowering tobacco taxes increases use and harms. The committee heard extended testimony and debated parity, revenue effects and constitutional funding trade‑offs.
Senate Finance heard opposing witness panels on SB 26‑086, a bill from Senator Janet Sullivan that would cap the excise tax on premium cigars and define a premium cigar as a hand‑rolled product with a whole‑leaf wrapper and no filter. Sponsor Sullivan said escalating excise rates push sales online or across state lines, penalize small in‑state retailers and reduce regulatory oversight of products sold through out‑of‑state channels.
Small‑business owners and trade representatives argued the current tax schedule (which rises as other tobacco taxes are adjusted) makes Colorado uncompetitive for premium cigars and funnels purchases to online warehouses that do not provide the same local jobs, oversight or tax remittances. Jimmy Hargrove, a Lakewood shop owner, told the committee that many customers now buy online and that a cap would recapture sales for Colorado businesses and local tax collections.
Public‑health groups strongly opposed the change. Janella Tyler of the American Cancer Society Cancer Action Network and Eric Hadorn of the American Heart Association said reducing tobacco excise taxes is correlated with greater use and harms, and urged senators to maintain voter‑approved sin‑tax levels that fund public programs. Opponents cited risks of premature deaths from tobacco‑related illnesses and warned that making any tobacco product more affordable reduces price‑driven deterrence, particularly among younger or lower‑income people.
Members questioned the parity between online sellers and brick‑and‑mortar retailers and whether existing enforcement successfully collects taxes and enforces age verification for online purchases. Supporters pointed to neighboring states with lower taxes and to store reports of cross‑border purchasing spikes after prior tax increases. Some senators said they would like more work addressing enforcement and potential backfill options for programs funded by current excise revenues (for example, early childhood programs funded by voter‑approved tobacco revenue).
What’s next: The committee debated amendments and motions, including a motion to send SB 26‑086 to the Committee on Appropriations and a subsequent motion to postpone indefinitely. Committee members were divided; the transcript records the motions and the roll‑call discussion but multiple senators said they wanted further conversation and budget analysis before a final decision.
