SB086 would create a new statutory definition of “premium cigar” and set a separate excise tax rate for those cigars at 20% of the manufacturer’s list price, effective July 1, 2026. The bill applies to the sale, use, consumption, handling, or distribution of premium cigars on or after that date.
As introduced, the measure would carve premium cigars out of Colorado’s general tobacco-products excise tax structure, which currently taxes most non-cigarette tobacco products at higher rates. The bill states that it does not change the additional 20% tax on premium cigars imposed by the Colorado Constitution, so the practical effect is a statutory rate reduction rather than a complete tax repeal.
Impact
The bill would amend Colorado Revised Statutes sections 39-28.5-101 and 39-28.5-102 by adding a definition of premium cigar and establishing a 20% statutory excise tax rate for that category. It would lower the statutory tax burden on premium cigars relative to the existing tobacco-products tax rates and would effectively roll back prior statutory increases for non-cigarette tobacco products. The measure would affect cigar retailers, distributors, manufacturers, and consumers, while leaving the constitutionally imposed premium cigar tax in place.
Sentiment
The available voting history suggests the bill did not advance in committee and faced clear opposition at the Senate Finance stage. A motion to refer the bill to Appropriations failed 2-6, and the committee then voted 8-0 to postpone the bill indefinitely. That pattern indicates little support for moving the tax cut forward, at least in the committee where it was heard.
Contention
The main point of contention is fiscal policy: supporters of the bill appear to favor reducing the excise tax on premium cigars, while opponents likely viewed the proposal as a tax cut that would reduce state revenue and create a special tax treatment for a narrow tobacco category. Another issue is the interaction with the Colorado Constitution, because the bill would lower only the statutory tax and would not eliminate the separate constitutional tax, which may limit the practical benefit and complicate the policy rationale. The committee votes show the bill was not broadly supported, but no transcript is available to identify specific arguments or speakers.