This proposal is a referred measure from the legislature to increase tobacco taxes.
- Increases taxes on cigarettes and tobacco products;
- Creates a new tax on nicotine (vaping) products; and
- Authorizes the new tax revenue to be spent on expanded preschool programs, K-12 education, affordable housing, eviction legal assistance, tobacco prevention, health care and general state spending.
This measure would incrementally increase cigarette and tobacco product taxes and create a new tax on nicotine products such as e-cigarettes.
Cigarettes are currently taxed in Colorado at a statutory rate of 20 cents per pack (one cent per cigarette). In 2004, Amendment 35 authorized an additional constitutional tax of 64 cents per pack (3.2 cents per cigarette), for a total state-levied cigarette tax of 84 cents. Proposition EE would incrementally increase the statutory cigarette tax rate to $2.00 per pack (10 cents per cigarette) by July 2027, increasing the total state-levied cigarette tax to $2.64 per pack.
Colorado currently taxes tobacco products (cigars and tobacco designed to be chewed or smoked in a pipe) at a statutory rate of 20% of the manufacturer's list price (MLP) and a constitutional rate of 20% of the MLP for a total rate of 40% of the MLP. This measure would incrementally raise the statutory tax rate to 42% by July 2027 for a new total tobacco products tax rate of 62% of the MLP.
While nicotine products such as e-cigarettes are currently not taxed in Colorado, this ballot measure would create a tax on nicotine products that would match other tobacco products’ tax rates. The rate would begin at 30% of the MLP in 2021 and would increase gradually to 62% of MLP by July 2027.
During the first three years after passage, funding would be directed to the state’s general fund and primarily used for K-12 education, rural schools, affordable housing development and eviction legal assistance. Revenue would subsequently be dedicated to health and education programs, including expanded preschool programs (which will receive the primary funding), tobacco education, health care and general state spending. The new revenue would be used to offer at least 10 hours per week of free preschool to every child in their final year before kindergarten, beginning in the 2023-24 school year.
Those in favor say:
- The proposed cigarette, tobacco and nicotine vaping taxes should reduce consumption of highly addictive and harmful products that cause cancer, heart and lung disease. Colorado has one of the lowest taxes on tobacco and no tax on vaping products, while also having one of the nation's highest rates of nicotine vaping among youth
- This measure would fund an innovative, first in the nation approach to preschool. Providing access for up to 10 hours a week of preschool at no cost during the last year before kindergarten would help working families. High quality preschool improves educational, health, and economic outcomes later in life.
Those opposed say:
- Many smokers use vaping products as a way to quit using traditional cigarettes. Taxes on vaping products discourage smokers from quitting. Youth vaping should be addressed through enforcement of existing age restrictions and additional education and prevention
- These are regressive taxes that disproportionately harm low income users of cigarette, tobacco, and nicotine products. Because these products are addictive, users may continue to purchase them even after a tax increase. The state should not depend on tax revenue from addictive products to fund state programs, especially when the tax is intended to decrease consumption of those products.