Colorado, Oregon to Consider Tobacco Tax Hikes

Voters in Colorado will decide whether to raise taxes on cigarettes but lower them on modified-risk tobacco products. 

October 16, 2020

DENVER—This Election Day, tobacco taxes are on the ballot in several states, with both Oregon and Colorado asking voters to weigh in on tobacco tax rates.

Colorado residents will decide whether to increase taxes on cigarettes and decrease taxes on modified-risk tobacco products (MRTPs), the Colorado Sun reports. Proposition EE would raise taxes on other tobacco products to 50% of the manufacturer’s list price starting in 2021, then jump to 62% on July 1, 2027. Tobacco products are currently taxed at 40%.

The ballot measure would also lower taxes on MRTPs for the next six years to 35% of the manufacturer’s list price in 2021, before gradually bumping them up to 41% on July 1, 2027. Altria, one of the country’s leading tobacco suppliers, responded to the announced ballot measures. “Altria’s tobacco companies oppose excise tax increases, but we’re pleased that some aspects of this measure are focused on tobacco harm reduction and may help transition adult smokers to a non-combustible future,” said David Sutton, a spokesman for Altria.

Meanwhile, Oregon voters will mull over a similar measure, the Herald and News reports. If approved, taxes on a pack of cigarettes would accelerate to $3.33 per pack, up from $1.33 per pack. Cigar taxes would double to $1 per cigar. The ballot question would also add a 65% wholesale tax to nicotine vaping products and e-cigarettes.

Rick Mauro, who owns three Rick’s Smoke Shop stores, said the cigarette tax increase by itself would cost him $20,000 in lost revenue. He said the higher taxes won’t deter smokers because “people [who] are going to smoke are going to smoke.” Instead, Mauro said smokers would switch to less expensive brands or start rolling their own cigarettes.