Democrats propose major tax increase on cigarettes and e-cigarettes

DENVER — Targeting teen nicotine vaping, Gov. Jared Polis on Wednesday announced a late-session bill to ask Colorado voters to significantly raise taxes on cigarettes and other tobacco products and impose taxes on nicotine vaping devices. “We have a moral imperative to reduce teen smoking and vaping we have a financial imperative for public health,” Polis said. Legislation being sponsored by Rep. Yadira Caraveo and Sen. Rhonda Fields, both Democrats, would ask voters in November if Colorado’s sales tax on cigarettes should increase from 84 cents to $2.59 a pack. The national median in 2018 was $1.66 per pack, according to the Urban-Brookings Tax Policy Center. If approved by voters, nicotine vaping devices would be taxed at 62 percent of their wholesale price. So, too, would other tobacco products. When asked why he waited until 7 business days before the end of the session to introduce this bill, Polis said “discussions have been underway for a number of months.” The tax hikes could generate more than $300 million a year for early childhood education, tobacco prevention and cessation programs, mental health and other services, the Democratic governor told a news conference. E-cigarettes heat a nicotine solution into a vapor that’s inhaled. A recent Colorado government study suggests 27 percent of minors regularly use the devices — one of the highest rates in the nation. Experts say vaping can lead to lifelong tobacco use — and that making smoking more expensive deters youth from taking up the habit and encourages smokers to quit. The average cost of a pack of cigarettes in Colorado is $5.60, including taxes, according to the Campaign for Tobacco-Free Kids. The proposed increase would bump that to about $8.19. In 2016, Colorado voters defeated a proposal to triple the state cigarette tax. The tax was last raised in 2004. Some 7 percent of Colorado minors and nearly 15 percent of adults smoked cigarettes in 2017, according to the state Department of Public Health and Environment. The percentage of adult tobacco users has declined from 20 percent in 2004. Democrats who control the Legislature are certain to pass the initiative before the 2019 session ends May 3. But an effort is underway to defeat the measure. Vaping groups have hired Ted Trimpa, a well-known progressive lobbyist, to work to defeat this bill. “I think it’s going to be difficult to get this through in the last ten days of the session,” Trimpa said. Business owners like Amanda Wheeler, an owner of vape shows in Colorado Springs, said the bill would shut down her business. “We are a small business. We can’t sustain a 62-percent tax on our products,” she said. Vape users like Matt Bernal says it would discourage smokers from quitting because this makes vaping expensive. “It’s been a perfect fit for me to quit tobacco,” Bernal said. “I was able to slow down and quit.” Polis, a first-term governor, already has signed into law a bill allowing local municipalities to impose their own taxes and regulations on tobacco products, including e-cigarettes, without losing their shares of the state’s tobacco tax. Another bill to limit where e-cigarettes can be used in an effort to combat rising teen use of nicotine-containing vaping devices is pending in the Senate. The bill would add electronic cigarettes and other vaping devices to the Colorado Clean Indoor Air Act, which restricts tobacco use at the workplace and in many public spaces. If the bill becomes law, it could cost people who smoke one pack of cigarettes a day an additional $639 annually.