Colorado lawmakers are considering SB 26-086, legislation that would define premium cigars in statute and cap the statutory excise tax on premium cigars at 20 percent of the manufacturer’s list price.
Under current law, premium cigars are taxed at significantly higher rates that have increased over time. SB 26-086 would provide tax relief by reducing the statutory excise tax rate from 56 percent range down to 20 percent. This change would restore balance and recognize that premium cigars are a distinct, handmade product typically purchased occasionally by adult consumers.
Premium cigar retailers in Colorado are small, specialty businesses that operate under strict age restrictions. They are not mass-market tobacco outlets. High percentage-based tax rates disproportionately affect these retailers because the tax increases as the price of premium, handcrafted products rises. That structure penalizes quality and craftsmanship rather than volume sales.
By establishing a clear statutory definition and a reasonable 20 percent cap, SB 26-086 provides predictability, fairness, and stability for Colorado small businesses while keeping adult consumer purchases within the state instead of pushing them to neighboring states.
Colorado should encourage lawful small businesses and adopt reasonable, proportional tax policy.
Contact your State Senator and urge them to support SB 26-086.