Cigarette Tax

C.R.S. tit. 39, art. 28
in effect

C.R.S. § 39-28-101 Definitions

39-28-101. Definitions. As used in this article 28, unless the context otherwise requires: (1) "Consumer" means any person, firm, limited liability company, partnership, or corporation who has title to or possession of cigarettes in storage for use or consumption in this state. (1.3) "Delivery sale" means a sale of cigarettes to a consumer in this state when: (a) The consumer submits an order for cigarettes to a delivery seller for sale by means other than an over-the-counter sale on the delivery seller's premises, including, but not limited to, telephone or other voice transmission, the mail or other delivery service, or the internet or other online service; and (b) The cigarettes are delivered when the seller is not in the physical presence of the consumer when the consumer obtains possession of the cigarettes by use of a common carrier, private delivery service, mail, or any other means. (1.7) "Delivery seller" means a person located outside of this state who makes delivery sales. (2) "Department" means the department of revenue. (2.5) "Master settlement agreement" shall have the same meaning as section 39-28-202 (5). (2.7) "Modified risk tobacco product" means any tobacco product for which the secretary of the United States department of health and human services has issued an order authorizing the product to be commercially marketed as a modified risk tobacco product in accordance with 21 U.S.C. sec. 387k, or any successor section. (3) "Sale" or "resale" includes installment, credit, and conditional sales and means any exchange, barter, or transfer of title or possession, or both, for a consideration to any other person, firm, partnership, limited liability company, or corporation within this state. It includes: (a) A gift by a person engaged in the business of selling cigarettes, for advertising, as a means of evading provisions of this article 28 or for any other purpose whatsoever; and (b) Delivery sales. (4) "Wholesaler" means any person, firm, limited liability company, partnership, or corporation who imports cigarettes into this state for sale or resale. The term also includes a delivery seller. (5) "Wholesale subcontractor" means any person, firm, limited liability company, partnership, or corporation who purchases cigarettes from a wholesaler for resale to a retailer in this state.

C.R.S. § 39-28-102 Licensing of wholesalers - rules - fines

39-28-102. Licensing of wholesalers - rules - fines. (1) It is unlawful for any wholesaler to sell or offer for sale in this state cigarettes without first obtaining a license therefor, granted and issued by the department, which license shall be in effect until June 30 following the date of issue, unless sooner revoked. Such licenses shall be granted only to such wholesalers who own or operate the places from which such sales are to be made, and, in case sales are made from two or more separate places by any such wholesaler, a separate license for each place of business shall be required. Such licenses shall be renewed only upon timely application and payment of the required fee prior to expiration. Such licenses may be transferred in the discretion of and pursuant to the rules adopted by the department. The license fee shall be ten dollars per year, and such license fees shall be credited to the general fund. Such license fees shall be reduced at the rate of two dollars and fifty cents for each expired quarter of the license year. The department shall, on reasonable notice and after a hearing, suspend or revoke the license of any wholesaler violating any provision of this article, and no license shall be issued to such wholesaler within a period of two years thereafter. The department may share information on the names and addresses of persons who purchased cigarettes for resale with the department of public health and environment and county and district public health agencies. The department shall refuse to issue a new or renewal wholesaler license, and shall revoke a wholesaler's license, if the wholesaler owes the state any delinquent taxes administered by the department or interest thereon pursuant to this title that have been determined by law to be due and unpaid, unless the wholesaler has entered into an agreement approved by the department to pay the amount due. (1.3) (a) In addition to the requirements set forth in subsection (1) of this section, no license shall be issued to a wholesaler unless the wholesaler: (I) Has a current license issued pursuant to section 39-26-103; (II) Provides evidence to the satisfaction of the executive director of the department demonstrating that the wholesaler will buy cigarettes from at least one manufacturer that is either part of the master settlement agreement or that places funds into a qualified escrow account pursuant to section 39-28-203 (2); and (III) Has filed with the department evidence of a surety bond issued by a company authorized to do business in this state in an amount equal to the wholesaler's anticipated total monthly purchase of stamps pursuant to section 39-28-104 for the benefit of the department. The amount of a wholesaler's anticipated total monthly purchase shall be determined solely in the discretion of the wholesaler. A wholesaler may file a replacement surety bond if the wholesaler's anticipated total monthly purchase of stamps changes after the wholesaler has been issued a license pursuant to this section. ase of stamps pursuant to section 39-28-104 for the benefit of the department. The amount of a wholesaler's anticipated total monthly purchase shall be determined solely in the discretion of the wholesaler. A wholesaler may file a replacement surety bond if the wholesaler's anticipated total monthly purchase of stamps changes after the wholesaler has been issued a license pursuant to this section. (b) In addition to the requirements set forth in subsection (1) of this section, no license shall be renewed unless a wholesaler: (I) Has a current license issued pursuant to section 39-26-103; (II) Provides evidence to the satisfaction of the executive director of the department demonstrating that the wholesaler has bought and will continue to buy cigarettes from at least one manufacturer that is either part of the master settlement agreement or places funds into a qualified escrow account pursuant to section 39-28-203 (2); and (III) Has filed with the department evidence of a surety bond issued by a company authorized to do business in this state in an amount equal to the wholesaler's anticipated total monthly purchase of stamps pursuant to section 39-28-104 for the benefit of the department. The amount of a wholesaler's anticipated total monthly purchase shall be solely in the discretion of the wholesaler. For each consecutive preceding year that a wholesaler has not been delinquent in the payment of taxes imposed under this part 1, as determined by the executive director of the department, the amount of the bond required shall be reduced by twenty percentage points of the wholesaler's anticipated total monthly purchase of stamps. A wholesaler may file a replacement surety bond if the wholesaler's anticipated total monthly purchase of stamps changes after the wholesaler's license has been renewed pursuant to this section. A wholesaler that has not been delinquent in the payment of such taxes for five consecutive years shall be exempt from the requirement to file a surety bond with the department. (1.5) (Deleted by amendment, L. 2008, p. 182, § 1, effective August 5, 2008.) (2) Repealed.

C.R.S. § 39-28-102.5 Licensing of wholesale subcontractors - rules - fines

39-28-102.5. Licensing of wholesale subcontractors - rules - fines. (1) It is unlawful for any wholesale subcontractor to sell or offer for sale cigarettes to a retailer in this state without first obtaining a license therefor, granted and issued by the department, which license shall be in effect until June 30 following the date of issue, unless sooner revoked. Such licenses shall be granted only to such wholesale subcontractors who own or operate the places from which such sales are to be made, and, in case sales are made from two or more separate places by any such wholesale subcontractor, a separate license for each place of business shall be required. No license shall be issued to a wholesale subcontractor unless the wholesale subcontractor has a current license issued pursuant to section 39-26-103. Such licenses shall be renewed only upon timely application and payment of the required fee prior to expiration. Such licenses may be transferred in the discretion of and pursuant to rules adopted by the department. The license fee shall be ten dollars per year, and such license fees shall be credited to the wholesale and distributing subcontractor license fund, which is hereby created in the state treasury. All moneys in the fund shall be subject to annual appropriation by the general assembly to the department for costs incurred in administering this section and section 39-28.5-104.5. Such license fees shall be reduced at the rate of two dollars and fifty cents for each expired quarter of the license year. The department shall, on reasonable notice and after a hearing, suspend or revoke the license of any wholesale subcontractor violating any provision of this article, and no license shall be issued to such wholesale subcontractor within a period of two years thereafter. The department may share information on the names and addresses of persons who purchased cigarettes from a wholesale subcontractor for resale with the department of public health and environment and county and district public health agencies. The department shall refuse to issue a new or renewal wholesale subcontractor license and shall revoke a wholesale subcontractor's license, if the wholesaler owes the state any delinquent taxes administered by the department or interest thereon pursuant to this title that have been determined by law to be due and unpaid, unless the wholesaler has entered into an agreement approved by the department to pay the amount due. (2) (Deleted by amendment, L. 2008, p. 183, § 2, effective August 5, 2008.)

C.R.S. § 39-28-103 Tax levied

39-28-103. Tax levied. (1) (a) Prior to January 1, 2021, there is levied and shall be collected and paid to the department a tax upon the sale of cigarettes by wholesalers of ten mills on each cigarette. (b) A tax is levied upon the sale of cigarettes by wholesalers, excluding cigarettes that are modified risk tobacco products, that is equal to: (I) Six and one-half cents per cigarette for sales on and after January 1, 2021, but prior to July 1, 2024; (II) Eight cents per cigarette for sales on and after July 1, 2024, but prior to July 1, 2027; and (III) Ten cents per cigarette for sales on and after July 1, 2027. (c) A tax is levied on the sale of cigarettes that are modified risk tobacco products that is equal to: (I) Three and one-quarter cents per cigarette for sales on and after January 1, 2021, but prior to July 1, 2024; (II) Four cents per cigarette for sales on and after July 1, 2024, but prior to July 1, 2027; and (III) Five cents per cigarette for sales on and after July 1, 2027. (d) The wholesaler shall pay the tax set forth in this section to the department, which shall collect the tax. (2) Repealed.

C.R.S. § 39-28-103.3 Inventory tax - definition

39-28-103.3. Inventory tax - definition. (1) As used in this section, "Colorado tax stamp" means a stamp that is affixed to, or an imprint or impression by a suitable metering machine approved by the department on a package containing cigarettes as evidence of the payment of tax imposed by this article 28, excluding the tax set forth in this section. (2) After January 1, 2022, in addition to any other tax imposed under this article 28 or section 21 of article X of the state constitution, there is levied a tax on cigarettes in a wholesaler's or wholesale subcontractor's possession or control that have a Colorado tax stamp that applies any time that the cigarette tax is increased. The tax is equal to the difference between the tax paid for the Colorado tax stamp currently affixed to a package of cigarettes and the tax that will be owed for the same Colorado tax stamp after the increase in the tax imposed per cigarette. It is unlawful for any person to affix a Colorado tax stamp on or after 12:01 a.m. on the day that a rate increase will take effect, to a package of cigarettes that reflects payment of the tax imposed prior to the increase. Any unaffixed stamps may be redeemed for credit pursuant to section 39-28-104 (3). (3) (a) After January 1, 2022, a wholesaler shall take an inventory of all packages of cigarettes with a Colorado tax stamp affixed thereto and of all unaffixed Colorado tax stamps in the wholesaler's possession or control as of 12:01 a.m. on the day that a rate increase will take effect. (b) After January 1, 2022, a wholesale subcontractor shall take an inventory of all packages of cigarettes with a Colorado tax stamp affixed thereto in the wholesale subcontractor's possession or control as of 12:01 a.m. on the day that a rate increase will take effect. (4) Every wholesaler and wholesale subcontractor shall file a report, on a form created by the department, of the inventory identified in accordance with subsection (3) of this section and pay the tax imposed under this section for the inventory. A wholesaler shall separately identify the number of packages with a Colorado tax stamp and the unaffixed Colorado tax stamps. The wholesaler or wholesale subcontractor shall remit the tax payment on or before the tenth day of the month following the required inventory. If payment is made on or before the due date, the wholesaler or wholesale subcontractor may deduct three percent of the tax imposed under this section, but, if any wholesaler or wholesale subcontractor is delinquent in remitting such payment, other than in unusual circumstances shown to the satisfaction of the executive director of the department, the wholesaler or wholesale subcontractor shall not be allowed to retain any amounts to cover the expense in collecting and remitting the tax and the penalty imposed under section 39-28-108 (2) applies. (5) The department may require wholesalers and wholesale subcontractors to use electronic funds transfers to remit tax payments due under this section and may require wholesalers and wholesale subcontractors to file tax returns electronically. The department may promulgate rules governing electronic payment and filing.

C.R.S. § 39-28-103.5 Tax levied - state constitution

39-28-103.5. Tax levied - state constitution. Pursuant to section 21 of article X of the state constitution, there is levied, in addition to the tax levied pursuant to section 39-28-103, a tax on the sale of cigarettes by wholesalers, at a rate of three and two-tenths cents per cigarette. The tax shall be paid to and collected by the department.

C.R.S. § 39-28-104 Evidence of payment of tax - credits - redemptions - repeal

39-28-104. Evidence of payment of tax - credits - redemptions - repeal. (1) (a) (I) Payment of the taxes imposed by sections 39-28-103 and 39-28-103.5 and section 21 of article X of the state constitution shall be evidenced by the affixing of stamps to, or by an imprint or impression by suitable metering machines approved by the department on, packages containing cigarettes. The department shall procure stamps of such design and legend as it deems necessary and suitable for the purpose. Except as provided in subsection (1)(b) of this section, the department shall sell such stamps for cash to licensed wholesalers at a discount of four percent of their face value for sales occurring after July 1, 2005, but before January 1, 2021, and four-tenths percent of their face value for sales occurring on and after January 1, 2021, if payment is made on or before the tenth day of the month following the month in which the purchase is made to cover the licensed wholesaler's expense in the collection and remittance of such tax; but, if any licensed wholesaler is delinquent in remitting such payment, other than in unusual circumstances shown to the satisfaction of the executive director of the department, the licensed wholesaler shall not be allowed to retain any amounts to cover his or her expense in collecting and remitting said tax, and, in addition, the penalty imposed under section 39-28-108 (2) shall apply. The department shall keep accurate records of all stamps sold to each wholesaler. No wholesaler shall sell or transfer any stamps purchased pursuant to this article 28. (II) The executive director of the department may enter into contracts with third parties to act as the department's agents for the sale of stamps and matters relating to the sale of stamps. (b) The tax imposed pursuant to section 39-28-103.5 and section 21 of article X of the state constitution shall not be subject to the discount provided for in paragraph (a) of this subsection (1). (c) Repealed. (1.5) In any month that a wholesaler purchases an amount of stamps that is greater than the wholesaler's anticipated total monthly purchase of stamps, which shall be determined from the surety bond filed pursuant to section 39-28-102 (1.3)(a)(III) and (1.3)(b)(III), the wholesaler shall be required to pay cash or certified funds or use one of the electronic payment options offered by the department for the stamps that exceed the anticipated total monthly purchase of stamps upon the delivery of the stamps. This subsection (1.5) shall not apply if the wholesaler is exempt from the surety bond requirement pursuant to section 39-28-102 (1.3)(b)(III). (2) Each wholesaler shall affix stamps or cause them to be affixed, in such manner as the department may specify, to each individual package of cigarettes sold or distributed by such wholesaler or, in lieu thereof, an imprint or impression by means of a suitable metering machine approved by the department. Such stamps or imprints or impressions may be affixed by the wholesaler at any time before the cigarettes are transferred out of his possession. (3) Credit shall be given by the department for all taxes levied pursuant to this article 28 on unsalable merchandise when the department is satisfied that the same has been returned to the manufacturer or has been destroyed by the wholesaler or when the stamps are unusable because the tax rate has changed. The department shall redeem any unused and uncancelled stamps presented by any wholesaler within one year after the date of issue of said stamps at the price paid therefor by such wholesaler. lable merchandise when the department is satisfied that the same has been returned to the manufacturer or has been destroyed by the wholesaler or when the stamps are unusable because the tax rate has changed. The department shall redeem any unused and uncancelled stamps presented by any wholesaler within one year after the date of issue of said stamps at the price paid therefor by such wholesaler. (4) (a) Prior to January 1, 2025, credit shall be given by the department to a wholesaler for all taxes levied pursuant to this article and section 21 of article X of the state constitution and paid pursuant to the provisions of this article 28 that are bad debts. Such credit shall offset taxes levied pursuant to this article and section 21 of article X of the state constitution and paid pursuant to the provisions of this article only. No credit shall be given unless the bad debt has been charged off as uncollectible on the books of the wholesaler. Subsequent to receiving the credit, if the wholesaler receives a payment for the bad debt, the wholesaler shall be liable to the department for the amount received and shall remit this amount in the next payment to the department under this section or section 39-28-105. (b) Any claim for a bad debt credit under this subsection (4) shall be supported by all of the following: (I) A copy of the original invoice issued by the wholesaler; (II) Evidence that the cigarettes described in the invoice were delivered to the person who ordered them; and (III) Evidence that the person who ordered and received the cigarettes did not pay the wholesaler for them and that the wholesaler used reasonable collection practices in attempting to collect the debt. (c) If credit is given to a wholesaler for a bad debt, the person who ordered and received the cigarettes but did not pay the wholesaler for them shall be liable in an amount equal to the credit for the tax imposed in this article on the cigarettes. Subsequent to receiving the credit, if the wholesaler receives a payment for the bad debt and the wholesaler makes a payment to the department, the amount of taxes owed by such person shall be reduced by the amount paid to the department. (d) As used in this subsection (4), "bad debt" means the taxes attributable to any portion of a debt that is related to a sale of cigarettes subject to tax under this article, that is not otherwise deductible or excludable, that has become worthless or uncollectible in the time after the tax has been paid pursuant to this section or section 39-28-105, and that is eligible to be claimed as a deduction pursuant to section 166 of the federal "Internal Revenue Code of 1986", as amended. A bad debt shall not include any interest on the wholesale price of cigarettes, uncollectible amounts on property that remain in the possession of the wholesaler until the full purchase price is paid, expenses incurred in attempting to collect any account receivable or any portion of the debt recovered, an account receivable that has been sold to a third party for collection, or repossessed property. (e) This subsection (4) is repealed, effective December 31, 2028.

C.R.S. § 39-28-104.5 Federal requirements - placement of labels - penalty

39-28-104.5. Federal requirements - placement of labels - penalty. (1) No person shall import into this state any package of cigarettes that violates any federal requirement for the placement of labels, warnings, or other information, including health hazards, required to be placed on the container or individual package. (2) No person shall sell or offer to sell a package of cigarettes or affix the stamp or imprint required by section 39-28-104 on a package of cigarettes unless that package of cigarettes complies with all federal tax laws, federal trademark and copyright laws, and federal laws regarding the placement of labels, warnings, or any other information upon a package of cigarettes. (3) No person shall sell or offer to sell a package of cigarettes or affix the stamp or imprint required by section 39-28-104 on a package of cigarettes if the package is marked as manufactured for use outside of the United States or if any label or language has been altered from the manufacturer's original packaging and labeling to conceal the fact that the package was manufactured for use outside of the United States. (4) (a) No person shall affix a stamp, label, or decal on a package of cigarettes to conceal the fact that the package was manufactured for use outside of the United States. (b) No person shall sell or offer to sell a package of cigarettes on which a stamp, label, or decal was affixed to conceal the fact that the package was manufactured for use outside of the United States. (5) The violation of any provision of this section is a class 2 misdemeanor. (6) (a) Any package of cigarettes found for sale at retail or wholesale at any place in this state that is marked for use outside of the United States is declared to be contraband goods and may be seized without a warrant by the department, by its agents or employees, or by any peace officer in this state when directed or requested by the department to do so. Nothing in this section shall be construed to require the department to confiscate packages of cigarettes that are so marked in quantities less than ten cartons when the packages are held for personal consumption and not for resale. (b) Any cigarettes seized by virtue of the provisions of this subsection (6) shall be confiscated, and the department shall destroy such confiscated goods.

C.R.S. § 39-28-105 Use of metering machines

39-28-105. Use of metering machines. (1) The department, if it determines that it is practicable to stamp by imprint or impression on packages of cigarettes by means of a metering machine, may authorize any licensed wholesaler to use any metering machine approved by the department in lieu of requiring the wholesaler to affix stamps to such packages. Such metering machines shall be sealed by the department and shall be used in accordance with rules and regulations prescribed by it. Any wholesaler authorized to use a metering machine shall file with the department evidence of a savings account, deposit, or certificate of deposit meeting the requirements of section 11-35-101, C.R.S., or a bond issued by a surety company authorized to do business in this state in the amount of one thousand dollars, conditioned upon the payment of the tax upon cigarettes so imprinted. (2) (a) The department may cause each metering machine approved by it to be read and inspected at least once each month. The department shall set the machine to the number of units requested by the wholesaler and shall determine as of the time of setting the amount of tax due from the wholesaler using such machine, after allowing the discount provided in section 39-28-104. The tax for each unit placed on the machine at the time of setting, less any discount that is not otherwise prohibited by paragraph (b) of this subsection (2) to cover the licensed wholesaler's expense in the collection and remittance of such tax, shall be due and payable to the department on or before the tenth day of the month following the month in which the meter is set. If any licensed wholesaler is delinquent in remitting such payment, other than in unusual circumstances shown to the satisfaction of the executive director, the licensed wholesaler shall not be allowed to retain any amounts to cover his or her expense in collecting and remitting said tax, and, in addition, the penalty imposed under section 39-28-108 (2) shall apply. (b) The tax imposed pursuant to section 39-28-103.5 and section 21 of article X of the state constitution shall not be subject to the discount provided for in paragraph (a) of this subsection (2).

C.R.S. § 39-28-106 Nonresident wholesalers

39-28-106. Nonresident wholesalers. (1) When the department determines that the collection of the tax imposed by the provisions of this article and section 21 of article X of the state constitution would be facilitated thereby, it may authorize any person, firm, limited liability company, partnership, or corporation outside of this state and engaged in the business of selling and shipping into this state cigarettes, upon complying with the requirements of this article, to affix or cause to be affixed the stamps, imprints, or impressions required by this article on behalf of the wholesalers within this state. The department may sell such stamps and approve the use of metering machines to such nonresident wholesalers as provided in this article; except that the nonresident wholesaler shall agree in writing to submit his or her books, accounts, and records to examination during reasonable business hours by any duly authorized agent of the department. Each such nonresident wholesaler shall appoint in writing the secretary of state of the state of Colorado to be his or her agent in this state for service of process, pursuant to part 7 of article 90 of title 7, C.R.S., with respect to foreign corporations. (2) Any nonresident wholesaler complying with the requirements and provisions of this section shall be deemed a licensed wholesaler within the meaning of this article and shall be subject to all provisions of this article applicable to wholesalers.

C.R.S. § 39-28-107 Unstamped packages - tax collected - fines - subject to confiscation - tobacco tax enforcement cash fund - creation

39-28-107. Unstamped packages - tax collected - fines - subject to confiscation - tobacco tax enforcement cash fund - creation. (1) (a) Any package of cigarettes found at any place in this state without a stamp or imprint affixed thereto as provided in this article, unless such cigarettes are in the possession of a licensed wholesaler in the original unopened shipping package or in transit to such wholesaler, are declared to be contraband goods and may be seized without a warrant by the department, its agents or employees, or by any peace officer in this state when directed or requested by the department to do so. Nothing in this section shall be construed to require the department to confiscate unstamped packages of cigarettes when it has reason to believe that the owner thereof is not willfully or intentionally evading the taxes imposed by the provisions of this article and section 21 of article X of the state constitution. The executive director may impose a civil penalty on any person, firm, limited liability company, partnership, or corporation for the purchase or possession of unstamped cigarettes, regardless of whether the cigarettes have been confiscated, in an amount that does not exceed twenty-five cents per cigarette purchased or possessed; except that the penalty shall not apply if the cigarettes are in the possession of a licensed wholesaler in the original unopened shipping package or in transit to such wholesaler. Any civil penalties received pursuant to this paragraph (a) shall be remitted to the state treasurer for deposit in the tobacco tax enforcement cash fund created in paragraph (b) of this subsection (1). (b) There is hereby created in the state treasury the tobacco tax enforcement cash fund. The fund consists of money deposited therein pursuant to subsection (1)(a) of this section and sections 39-28-116 (5), 39-28.5-106 (4), and 39-28.6-107 (4). The money in the fund is subject to annual appropriation by the general assembly to the department for the purpose of enforcing this article 28 and articles 28.5 and 28.6 of this title 39. Any money not appropriated by the general assembly remains in the fund and shall not be transferred or revert to the general fund at the end of any fiscal year. (c) The provisions of this section shall not apply to cigarettes purchased from a United States military exchange or commissary, so long as the cigarettes are not for resale in this state. (2) Any cigarettes seized by virtue of the provisions of this section shall be confiscated, and the department shall sell such confiscated goods at a public sale to a licensed wholesaler to the best advantage of this state. The proceeds from such sale shall be remitted to the state treasurer and distributed as provided in section 39-28-110 (1). Such sale by the state shall not relieve the purchaser at such sale from paying the tax and stamping the articles so sold to him or her in the manner provided in this article. The act or omission of any officer, agent, or other person acting for or employed by any person, firm, limited liability company, partnership, or corporation shall be deemed to be the act or omission of such person, firm, limited liability company, partnership, or corporation, as well as his or her own.

C.R.S. § 39-28-108 Penalty

39-28-108. Penalty. (1) Any person, firm, limited liability company, partnership, or corporation or agent thereof who at retail sells or offers for sale, displays for sale, or possesses with intent to sell any cigarettes, the package of which does not bear the stamp, or an imprint or impression by a suitable metering machine approved by the department, evidencing the payment of the taxes imposed by this article and section 21 of article X of the state constitution, shall be punished as provided in section 39-21-118. (2) (a) If a person neglects or refuses to make a return as required by this article, the executive director of the department shall impose a penalty of one hundred dollars. (b) If a person fails to pay the tax in the time allowed for the discount in section 39-28-104 (1) or 39-28-103.3, a penalty equal to ten percent thereof plus one-half of one percent per month from the date when due, not to exceed eighteen percent in the aggregate, together with interest on such delinquent taxes at the rate computed under section 39-21-110.5, shall apply. (c) In computing and assessing the penalty, penalty interest, and interest pursuant to paragraph (b) of this subsection (2), the executive director of the department may make an estimate, based upon such information as may be available, of the amount of taxes due for the period for which the taxpayer is delinquent.

C.R.S. § 39-28-109 Records - examination - returns

39-28-109. Records - examination - returns. Each wholesaler shall keep and preserve complete and accurate records of all cigarettes purchased and sold by him in accordance with the provisions of section 39-21-113. Any nonresident wholesaler, authorized pursuant to section 39-28-106, shall make available to the department, in the city and county of Denver, said records or, in the alternative, shall bear the cost of examination by an agent authorized by the executive director of the department of revenue at the place where such books, accounts, and records are kept. Such cost shall consist of a charge of twenty-five dollars per diem for the period required to make such examination, with a minimum charge of seventy-five dollars. The department may investigate and examine the stock of cigarettes upon any premises where the same are possessed, stored, or sold for the purpose of determining whether the provisions of this article have been complied with. The records which the wholesaler keeps shall be of such kind and in such form as the department prescribes. Each wholesaler shall make a return to the department each month containing, among other things, the total number of packages of cigarettes sold by him during the preceding month and the tax due thereon, which return shall be upon forms prescribed and furnished by the department and shall be filed by the tenth day of the month following the month reported.

C.R.S. § 39-28-110 Distribution of tax collected

39-28-110. Distribution of tax collected. (1) (a) All money received and collected in payment of the tax imposed by this article 28, except license fees received under section 39-28-102 and the money collected pursuant to section 39-28-103.5, shall be transmitted to the state treasurer who shall distribute the money as follows: Fifteen percent to the general fund and eighty-five percent to the old age pension fund. (b) The net revenue that is credited to the old age pension fund created in section 1 of article XXIV of the state constitution in accordance with subsection (1)(a) of this section and section 2 (a) of article XXIV of the state constitution is transferred to the general fund in accordance with section 7 (c) of article XXIV of the state constitution. Of this money or the fifteen percent that is directly credited to the general fund, the state treasurer shall transfer an amount equal to the total revenue that is attributable to the tax imposed under section 39-28-103.3 and the tax increase set forth in section 39-28-103 approved by the voters at the statewide election in November 2020 to the 2020 tax holding fund created in section 24-22-118 (1). (2) All moneys received and collected in payment of the tax imposed pursuant to section 39-28-103.5 shall be transmitted to the state treasurer for deposit in the tobacco tax cash fund created in section 24-22-117, C.R.S.

C.R.S. § 39-28-110.5 Revenue and spending limitations

39-28-110.5. Revenue and spending limitations. Notwithstanding any limitations on revenue, spending, or appropriations contained in section 20 of article X of the state constitution or any other provision of law, any revenue generated by the inventory tax imposed under section 39-28-103.3 and the per cigarette tax increase set forth in section 39-28-103 approved by the voters at the statewide election in November 2020, may be collected and spent as a voter-approved revenue change.

C.R.S. § 39-28-111 Exempt sales

39-28-111. Exempt sales. The sales of cigarettes to the United States government or any of its agencies, sales in interstate commerce, or transactions the taxation of which is prohibited by the constitution of the United States are exempted from the provisions of this article. Such exempt sales shall be reported to the department with such information as the department shall require.

C.R.S. § 39-28-112 Taxation of cigarettes, tobacco products, or nicotine products by municipalities, counties, and cities and counties - definitions

39-28-112. Taxation of cigarettes, tobacco products, or nicotine products by municipalities, counties, and cities and counties - definitions. (1) This article 28 does not prevent a statutory or home rule municipality, county, or city and county in this state from imposing, levying, and collecting any special sales tax upon sales of cigarettes, tobacco products, or nicotine products, or upon the occupation or privilege of selling cigarettes, tobacco products, or nicotine products, nor does this article 28 affect any existing authority of local governments to impose a special sales tax on cigarettes, tobacco products, and nicotine products to be used for local and governmental purposes. (2) (a) Each county in the state is authorized to levy, collect, enforce, and administer a county special sales tax upon all sales of cigarettes, tobacco products, or nicotine products under the following circumstances: (I) A county may levy, collect, enforce, and administer a county special sales tax upon all sales of cigarettes, tobacco products, or nicotine products pursuant to this subsection (2) in the unincorporated areas of the county; (II) A county may levy, collect, enforce, and administer a county special sales tax upon all sales of cigarettes, tobacco products, or nicotine products pursuant to this subsection (2) in the municipalities within the boundaries of the county, in whole or in part, that do not levy a municipal special sales tax on the sale of cigarettes, tobacco products, or nicotine products. The county may levy a special sales tax in a municipality pursuant to this subsection (2)(a)(II) only until the municipality obtains voter approval to levy a municipal special sales tax on cigarettes, tobacco products, or nicotine products. If the municipality obtains such voter approval, the county special sales tax authorized by this subsection (2)(a)(II) is invalid within the corporate limits of the municipality unless the county enters into an intergovernmental agreement with the municipality pursuant to subsection (2)(a)(III) of this section that authorizes the county to continue to levy, collect, enforce, and administer the special sales tax on cigarettes, tobacco products, or nicotine products within the corporate limits of the municipality. (III) A county may levy, collect, enforce, and administer a county special sales tax upon all sales of cigarettes, tobacco products, or nicotine products pursuant to this subsection (2) in each municipality within the boundaries of the county, in whole or in part, that levies a municipal special sales tax on the sale of cigarettes, tobacco products, or nicotine products, if the governing body of the county and the governing body of the municipality enter into an intergovernmental agreement pertaining to the county's levy, collection, enforcement, and administration of a county special sales tax upon all sales of all cigarettes, tobacco products, or nicotine products within the corporate limits of the municipality. An intergovernmental agreement pursuant to this subsection (2)(a)(III) may include a provision for the apportionment of a specified percentage of the gross county cigarettes, tobacco products, or nicotine products special sales tax revenue collected by the county to the municipality. (b) Notwithstanding section 29-2-103 (2), a county may levy, collect, enforce, and administer a special sales tax pursuant to this subsection (2) in less than the entire county when the county satisfies one or more of the conditions of this subsection (2). of the gross county cigarettes, tobacco products, or nicotine products special sales tax revenue collected by the county to the municipality. (b) Notwithstanding section 29-2-103 (2), a county may levy, collect, enforce, and administer a special sales tax pursuant to this subsection (2) in less than the entire county when the county satisfies one or more of the conditions of this subsection (2). (c) [Editor's note: This version of subsection (2)(c) is effective until July 1, 2025.] No special sales tax shall be levied pursuant to this subsection (2) until the proposal has been referred to and approved by the eligible electors of the county in accordance with article 2 of title 29. Any proposal for the levy of a special sales tax in accordance with this subsection (2) shall be submitted to the eligible electors of the county only on the date of the state general election or on the first Tuesday in November of an odd-numbered year. Any election on the proposal must be conducted by the county clerk and recorder in accordance with the "Uniform Election Code of 1992", articles 1 to 13 of title 1. (c) [Editor's note: This version of subsection (2)(c) is effective July 1, 2025.] No special sales tax shall be levied pursuant to this subsection (2) until the proposal has been referred to and approved by the eligible electors of the county in accordance with part 1 of article 2 of title 29. Any proposal for the levy of a special sales tax in accordance with this subsection (2) shall be submitted to the eligible electors of the county only on the date of the state general election or on the first Tuesday in November of an odd-numbered year. Any election on the proposal must be conducted by the county clerk and recorder in accordance with the "Uniform Election Code of 1992", articles 1 to 13 of title 1. (3) If a county levies, collects, enforces, and administers a special sales tax in a municipality that has already obtained voter approval to levy a municipal special sales tax on the sale of cigarettes, tobacco products, or nicotine products, the county special sales tax is invalid within the corporate limits of the municipality unless the county enters into an intergovernmental agreement with the municipality pursuant to subsection (2)(a)(III) of this section that authorizes the county to continue to levy, collect, enforce, and administer the special sales tax on cigarettes, tobacco products, or nicotine products within the corporate limits of the municipality. (4) (a) Each municipality in the state is authorized to levy, collect, enforce, and administer a municipal special sales tax upon all sales of cigarettes, tobacco products, or nicotine products. (b) A special sales tax shall not be levied pursuant to subsection (4)(a) of this section until the proposal has been referred to and approved by the eligible electors of the municipality in accordance with article 10 of title 31. Any proposal for the levy of a special sales tax in accordance with subsection (4)(a) of this section must be submitted to the eligible electors of the municipality on the date of the state general election, on the first Tuesday in November of an odd-numbered year, or on the date of a municipal biennial election. Any election on the proposal must be conducted by the clerk of the municipality in accordance with the "Colorado Municipal Election Code of 1965", article 10 of title 31. of this section must be submitted to the eligible electors of the municipality on the date of the state general election, on the first Tuesday in November of an odd-numbered year, or on the date of a municipal biennial election. Any election on the proposal must be conducted by the clerk of the municipality in accordance with the "Colorado Municipal Election Code of 1965", article 10 of title 31. (5) If a county or municipality obtained approval from the eligible electors of the county or municipality prior to July 1, 2019, to levy, collect, enforce, and administer a special sales tax on the sale of cigarettes, tobacco products, or nicotine products, the special sales tax is valid and the county or municipality is authorized to continue to levy, collect, enforce, and administer the special sales tax; except that, in the case of a county, the county is authorized to continue to levy, collect, enforce, and administer the special sales tax so long as the county complies with subsection (2) of this section. If a county levies, collects, enforces, and administers a special sales tax in a municipality that has already obtained voter approval to levy a municipal special sales tax on the sale of cigarettes, tobacco products, or nicotine products, the county special sales tax is invalid within the corporate limits of the municipality unless the county enters into an intergovernmental agreement with the municipality pursuant to subsection (3) of this section that authorizes the county to continue to levy, collect, enforce, and administer the special sales tax on cigarettes, tobacco products, or nicotine products within the corporate limits of the municipality. (6) (a) Notwithstanding article 2 of title 29, a special sales tax imposed by a county or municipality pursuant to this section shall not be collected, administered, or enforced by the department of revenue, but shall instead be collected, administered, and enforced by the county or municipality imposing the special sales tax. (b) A county or municipality in which a special sales tax is imposed pursuant to this section may authorize a retailer selling cigarettes, tobacco products, or nicotine products to retain a percentage of the special sales tax collected pursuant to this section to cover the expenses of collecting and remitting the special sales tax to the county or municipality. The county or municipality shall determine the percentage that a retailer may retain pursuant to this subsection (6)(b). (7) A county or municipality in which the eligible electors have approved a special sales tax pursuant to this section may credit the revenues collected from the special sales tax to the general fund of the county or municipality or to any special fund created in the county's or municipality's treasury. The governing body of a county or municipality may use revenues collected from the special sales tax imposed pursuant to this section for any purpose as determined by the governing body. (8) As used in this section, unless the context otherwise requires: (a) "Cigarettes, tobacco products, or nicotine products" has the same meaning as set forth in section 18-13-121 (5). (b) "Special sales tax" means a sales tax imposed by a local government that is separate from a general sales tax imposed pursuant to section 29-2-102 or 29-2-103, as applicable, and may be imposed in addition to the taxes imposed pursuant to this part 1.

C.R.S. § 39-28-114 Prohibited acts - penalties

39-28-114. Prohibited acts - penalties. It is unlawful for any wholesaler to sell and distribute any cigarettes in this state without a license or without first affixing the stamp, imprint, or impression upon each package of cigarettes, as provided for in this article, or to willfully make any false or fraudulent return, or false statement on any return, or to willfully evade the payment of the tax, or any part thereof, as imposed by this article. Any wholesaler, or agent thereof, who willfully violates any provision of this article shall be punished as provided by section 39-21-118.

C.R.S. § 39-28-115 List of licensed wholesalers - published on website

39-28-115. List of licensed wholesalers - published on website. On or before December 31, 2009, the department shall publish on its website a list of the names and addresses of all licensed wholesalers. The list shall be updated within seven days of any changes to the list.

C.R.S. § 39-28-116 Minimum price for cigarettes

39-28-116. Minimum price for cigarettes. (1) On and after January 1, 2021, but before July 1, 2024, no person shall sell or offer for sale cigarettes to a consumer for less than seven dollars per package of twenty cigarettes or seventy dollars per carton of two hundred cigarettes, including all applicable taxes. (2) On and after July 1, 2024, no person shall sell or offer for sale cigarettes to a consumer for less than seven dollars and fifty cents per package of twenty cigarettes or seventy-five dollars per carton of two hundred cigarettes, including all applicable taxes. (3) A person who violates subsection (1) or (2) of this section, in addition to other penalties provided by law, shall be liable for a civil penalty in the following amounts: (a) Five hundred dollars for a first violation within a five-year period; (b) One thousand dollars for a second violation within a five-year period; and (c) One thousand five hundred dollars for a third violation within a five-year period. (4) No person shall be liable under this section for more than one violation of this section during a single day. (5) The department of revenue shall remit any civil penalties received pursuant to this section to the state treasurer for deposit in the tobacco tax enforcement cash fund created section 39-28-107 (1)(b). (6) In its annual June forecast, legislative council staff shall report an estimate for the current state fiscal year of the additional sales tax revenue that is attributable to the applicable minimum price set forth in this section. On June 30 of the fiscal year, the state treasurer shall transfer an amount equal to seventy-three percent of the legislative council staff estimate from the general fund to the preschool programs cash fund created in section 26.5-4-209.

C.R.S. § 39-28-201 Legislative declaration

39-28-201. Legislative declaration. (1) The general assembly hereby finds, determines, and declares: (a) That cigarette smoking presents serious public health concerns to the state and to the citizens of the state. The surgeon general has determined that smoking causes lung cancer, heart disease and other serious diseases, and that there are hundreds of thousands of tobacco-related deaths in the United States each year. These diseases most often do not appear until many years after the person in question begins smoking. (b) That cigarette smoking also presents serious financial concerns for the state. Under certain health-care programs, the state may have a legal obligation to provide medical assistance to eligible persons for health conditions associated with cigarette smoking, and those persons may have a legal entitlement to receive such medical assistance. (c) That under these programs, the state pays millions of dollars each year to provide medical assistance for these persons for health conditions associated with cigarette smoking. (d) That it is the policy of the state that financial burdens imposed on the state by cigarette smoking be borne by tobacco product manufacturers rather than by the state to the extent that such manufacturers either determine to enter into a settlement with the state or are found culpable by the courts. (e) That on November 23, 1998, leading United States tobacco product manufacturers entered into a settlement agreement, entitled the "master settlement agreement," with the state. The master settlement agreement obligates these manufacturers, in return for a release of past, present and certain future claims against them as described therein, to pay substantial sums to the state, tied in part to their volume of sales; to fund a national foundation devoted to the interests of public health; and to make substantial changes in their advertising and marketing practices and corporate culture, with the intention of reducing underage smoking. (f) That it would be contrary to the policy of the state if tobacco product manufacturers who determine not to enter into such a settlement could use a resulting cost advantage to derive large, short-term profits in the years before liability may arise without ensuring that the state will have an eventual source of recovery from them if they are proven to have acted culpably. It is thus in the interest of the state to require that such manufacturers establish a reserve fund to guarantee a source of compensation and to prevent such manufacturers from deriving large, short-term profits and then becoming judgment-proof before liability may arise.

C.R.S. § 39-28-202 Definitions

39-28-202. Definitions. As used in this part 2: (1) "Adjusted for inflation" means increased in accordance with the formula for inflation adjustment set forth in exhibit C to the master settlement agreement. (2) "Affiliate" means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. Solely for purposes of this definition, the terms "owns," "is owned," and "ownership" mean ownership of an equity interest, or the equivalent thereof, of ten percent or more, and the term "person" means an individual, partnership, committee, association, corporation, or any other organization or group of persons. (3) "Allocable share" means allocable share as that term is defined in the master settlement agreement. (4) (a) "Cigarette" means any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains: (I) Any roll of tobacco wrapped in paper or in any substance not containing tobacco; or (II) Tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or (III) Any roll of tobacco wrapped in any substance containing tobacco that, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subparagraph (I) of this paragraph (a). (b) The term "cigarette" includes roll-your-own, i.e., any tobacco that, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes. (c) For purposes of this definition of "cigarettes", 0.09 ounces of roll-your-own tobacco shall constitute one individual "cigarette". (5) "Master settlement agreement" means the settlement agreement and related documents dated November 23, 1998, entered into by the state and leading United States tobacco product manufacturers and attached as exhibit A to the consent decree approved by the district court for the city and county of Denver on November 25, 1998, in civil action no. 97CV3432. (6) "Qualified escrow fund" means an escrow arrangement with a federally or state chartered financial institution having no affiliation with any tobacco product manufacturer and having assets of at least one billion dollars, where such arrangement requires that such financial institution hold the escrowed funds' principal for the benefit of releasing parties and prohibits the tobacco product manufacturer placing the funds into escrow from using, accessing, or directing the use of the funds' principal except as consistent with section 39-28-203 (2). (7) "Released claims" means released claims as that term is defined in the master settlement agreement. (8) "Releasing parties" means releasing parties as that term is defined in the master settlement agreement. hibits the tobacco product manufacturer placing the funds into escrow from using, accessing, or directing the use of the funds' principal except as consistent with section 39-28-203 (2). (7) "Released claims" means released claims as that term is defined in the master settlement agreement. (8) "Releasing parties" means releasing parties as that term is defined in the master settlement agreement. (9) (a) "Tobacco product manufacturer" means an entity that, after July 1, 1999, directly and not exclusively through any affiliate: (I) Manufactures anywhere cigarettes which the manufacturer intends to be sold in the United States, including cigarettes intended to be sold in the United States through an importer; provided, however, that an entity that manufactures cigarettes that it intends to be sold in the United States shall not be considered a tobacco product manufacturer under this paragraph (a) if: (A) Such cigarettes are sold in the United States exclusively through an importer that is an original participating manufacturer, as that term is defined in the master settlement agreement, that will be responsible for the payments under the master settlement agreement with respect to such cigarettes as a result of the provisions of subsection II(mm) of the master settlement agreement and that pays the taxes specified in section II(z) of the master settlement agreement; and (B) The manufacturer of such cigarettes does not market or advertise such cigarettes in the United States; (II) Is the first purchaser anywhere for resale in the United States of cigarettes manufactured anywhere that the manufacturer does not intend to be sold in the United States; or (III) Becomes a successor of an entity described in subparagraph (I) or (II) of this paragraph (a). (b) "Tobacco product manufacturer" does not include an affiliate of a tobacco product manufacturer unless such affiliate itself falls within subparagraphs (I) through (III) of paragraph (a) of this subsection (9). (10) "Units sold" means the number of individual cigarettes sold in the state by the applicable tobacco product manufacturer, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, during the year in question, as measured by excise taxes collected by the state on containers of roll-your-own tobacco, and on packs of cigarettes bearing the excise tax stamp of the state. The department shall promulgate such rules as are necessary to ascertain the amount of state excise tax paid on the cigarettes of such tobacco product manufacturer for each year.

C.R.S. § 39-28-203 Requirements

39-28-203. Requirements. Any tobacco product manufacturer selling cigarettes to consumers within the state, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, after July 1, 1999, shall either: (1) Become a participating manufacturer as that term is defined in section II(jj) of the master settlement agreement and generally perform its financial obligations under the master settlement agreement; or (2) (a) Place into a qualified escrow fund by April 15 of the year following the year in question the following amounts as such amounts are adjusted for inflation: (I) 1999: $.0094241 per unit sold after July 1, 1999; (II) 2000: $.0104712 per unit sold; (III) For each of 2001 and 2002: $.0136125 per unit sold; (IV) For each of 2003 through 2006: $.0167539 per unit sold; (V) For each of 2007 and each year thereafter: $.0188482 per unit sold. (b) A tobacco product manufacturer that places funds into escrow pursuant to paragraph (a) of this subsection (2) shall receive the interest or other appreciation on such funds as earned. Such funds themselves shall be released from escrow only under the following circumstances: (I) To pay a judgment or settlement on any released claim brought against such tobacco product manufacturer by the state or any releasing party located or residing in the state. Funds shall be released from escrow under this subparagraph (I): (A) In the order in which they were placed into escrow; and (B) Only to the extent and at the time necessary to make payments required under such judgment or settlement; (II) (A) To the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow on account of units sold in the state in a particular year was greater than the master settlement agreement payments, as determined pursuant to section IX(i) of that agreement including after final determination of all adjustments, that such manufacturer would have been required to make on account of such units sold had it been a participating manufacturer, the excess shall be released from escrow and revert back to such tobacco product manufacturer; (B) If Senate Bill 04-182, enacted at the second regular session of the sixty-fourth general assembly, or any portion of the amendment to sub-subparagraph (A) of this subparagraph (II) made by Senate Bill 04-182 is held by a court of competent jurisdiction to be unconstitutional, then sub-subparagraph (A) of this subparagraph (II) shall be deemed to be repealed in its entirety. If this paragraph (b) shall thereafter be held by a court of competent jurisdiction to be unconstitutional, then Senate Bill 04-182 shall be deemed repealed, and sub-subparagraph (A) of this subparagraph (II) shall be restored as if no such amendments had been made. Neither any holding of unconstitutionality nor the repeal of sub-subparagraph (A) of this subparagraph (II) shall affect, impair, or invalidate any other portion of this section, and such remaining portions of this section shall at all times continue in full force and effect. (III) To the extent not released from escrow under subparagraph (I) or (II) of this paragraph (b), funds shall be released from escrow and revert back to such tobacco product manufacturer twenty-five years after the date on which the funds were placed into escrow. e any other portion of this section, and such remaining portions of this section shall at all times continue in full force and effect. (III) To the extent not released from escrow under subparagraph (I) or (II) of this paragraph (b), funds shall be released from escrow and revert back to such tobacco product manufacturer twenty-five years after the date on which the funds were placed into escrow. (c) (I) Each tobacco product manufacturer that elects to place funds into escrow pursuant to this subsection (2) shall annually certify to the attorney general that it is in compliance with this subsection (2). The attorney general may bring a civil action on behalf of the state against any tobacco product manufacturer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall: (A) Be required within fifteen days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a violation of this subsection (2), may impose a civil penalty, to be paid to the general fund of the state, in an amount not to exceed five percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed one hundred percent of the original amount improperly withheld from escrow; (B) In the case of a knowing violation, be required within fifteen days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a knowing violation of this subsection (2), may impose a civil penalty, to be paid to the general fund of the state, in an amount not to exceed fifteen percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed three hundred percent of the original amount improperly withheld from escrow; and (C) In the case of a second or subsequent knowing violation, be prohibited from selling cigarettes to consumers within the state, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, for a period not to exceed two years. (II) Each failure to make an annual deposit required under this section shall constitute a separate violation.

C.R.S. § 39-28-301 Legislative declaration

39-28-301. Legislative declaration. (1) The general assembly hereby finds and declares that: (a) Violations of the tobacco escrow funds act threaten the integrity of the master settlement agreement, the fiscal soundness of the state, and the public health. (b) Enacting procedural enhancements will aid the enforcement of the tobacco escrow funds act and thereby safeguard the master settlement agreement, the fiscal soundness of the state, and the public health. (c) The provisions of this part 3 are not intended to and shall not be interpreted to amend the tobacco escrow funds act.

C.R.S. § 39-28-302 Definitions

39-28-302. Definitions. As used in this part 3, unless the context otherwise requires: (1) "Brand family" means all styles of cigarettes sold under the same trade mark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, "menthol", "lights", "kings", and "100s", and includes any brand name, alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes. (2) "Cigarette" has the same meaning as set forth in section 39-28-202 (4). (3) "Department" means the department of revenue. (4) "Master settlement agreement" has the same meaning as set forth in section 39-28-202 (5). (5) "Nonparticipating manufacturer" means any tobacco product manufacturer that is not a participating manufacturer. (6) "Participating manufacturer" has the same meaning as set forth in section II (jj) of the master settlement agreement and all amendments thereto. (7) "Qualified escrow fund" has the same meaning as set forth in section 39-28-202 (6). (8) "Stamping agent" means a person that is authorized to affix tax stamps to packages or other containers of cigarettes or tobacco products under section 39-28-104 or a person that is required to pay the tobacco products tax imposed pursuant to section 39-28.5-102 on roll-your-own tobacco for cigarettes. (9) "Tobacco control special fund" means a separate fund created by this part 3, the revenues of which do not pass through the general fund, and that will by used by the department for the enforcement of this part 3 and the tobacco escrow funds act. (10) "Tobacco escrow funds act" or "act" means those provisions that are referred to as the model act in the master settlement agreement and that are codified as part 2 of this article. (11) "Tobacco product manufacturer" has the same meaning as set forth in section 39-28-202 (9). (12) "Units sold" has the same meaning as set forth in section 39-28-202 (10).

C.R.S. § 39-28-303 Certifications - directory - tax stamps

39-28-303. Certifications - directory - tax stamps. (1) Certification. (a) Every tobacco product manufacturer whose cigarettes are sold in this state whether directly or through a distributor, retailer, or similar intermediary or intermediaries shall execute and deliver in the manner prescribed by the department a certification to the executive director of the department no later than the thirtieth day of April each year certifying under penalty of perjury that, as of the date of such certification, the tobacco product manufacturer either is a participating manufacturer or is in full compliance with the tobacco escrow funds act and all implementing regulations. (b) A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update the list thirty days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the department. (c) A nonparticipating manufacturer shall include in its certification a complete list of all of its brand families, and the list shall: (I) Separately list: (A) Brand families of cigarettes and the number of units sold for each brand family that were sold in the state during the preceding calendar year; and (B) All of the nonparticipating manufacturer's brand families that have been sold in the state at any time during the current calendar year; (II) Indicate by an asterisk, any brand family sold in the state during the preceding calendar year that is no longer being sold in the state as of the date of such certification; and (III) Identify by name and address any other manufacturer of such brand families in the preceding calendar year. (d) A nonparticipating manufacturer shall update a certification thirty days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the department. (e) A certification of a nonparticipating manufacturer shall further certify: (I) That the nonparticipating manufacturer is registered to do business in the state or has appointed a resident agent for service of process and provided notice thereof as required by section 39-28-304; (II) That the nonparticipating manufacturer has: (A) Established and continues to maintain a qualified escrow fund, as defined in section 39-28-202 (6); and (B) Executed a qualified escrow agreement that has been reviewed and approved by the attorney general and that governs the qualified escrow fund; (III) That the nonparticipating manufacturer is in full compliance with the tobacco escrow funds act, this part 3, and any rules promulgated pursuant to the tobacco escrow funds act or this part 3; and (IV) That information pertaining to the qualified escrow fund, including: (A) The name, address, and telephone number of the financial institution where the nonparticipating manufacturer has established the qualified escrow fund required by section 39-28-203 and all rules promulgated thereto; (B) The account number of the qualified escrow fund and sub-account number for the state of Colorado; (C) The amount the nonparticipating manufacturer placed in the fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each deposit, and such evidence or verification as may be deemed necessary by the department to confirm the foregoing; and (D) The amounts of and dates of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from the fund or from any other qualified escrow fund into which it ever made escrow payments pursuant to the tobacco escrow funds act and all rules promulgated thereto. , and such evidence or verification as may be deemed necessary by the department to confirm the foregoing; and (D) The amounts of and dates of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from the fund or from any other qualified escrow fund into which it ever made escrow payments pursuant to the tobacco escrow funds act and all rules promulgated thereto. (f) (I) A tobacco product manufacturer may not include a brand family in its certification unless: (A) In the case of a participating manufacturer, the participating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of calculating its payments under the master settlement agreement for the relevant year in the volume and shares determined pursuant to the master settlement agreement; and (B) In the case of a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of the tobacco escrow funds act. (II) Nothing in this paragraph (f) shall be construed as limiting or otherwise affecting the state's right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the master settlement agreement or for purposes of part 2 of this article. (g) Tobacco product manufacturers shall maintain all invoices and documentation of sales and other such information relied upon for such certification for a period of five years, unless otherwise required by law to maintain them for a greater period. (2) Directory of cigarettes approved for stamping and sale. (a) Not later than June 1, 2003, the department shall develop and publish on its website a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subsection (1) of this section and all brand families that are listed in such certifications; except that: (I) The department shall not include or retain in the directory the name or brand families of any nonparticipating manufacturer that has failed to provide the required certification or whose certification the department determines is not in compliance with paragraphs (c) and (d) of subsection (1) of this section, unless the department has determined that the violation has been cured to the satisfaction of the department. (II) Neither a tobacco product manufacturer nor brand family shall be included or retained in the directory if the executive director of the department concludes that: (A) In the case of a nonparticipating manufacturer, any escrow payment required pursuant to the tobacco escrow funds act for any period for any brand family, whether or not listed by the nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the attorney general; or (B) Any outstanding final judgment, including interest thereon, for violations of the tobacco escrow funds act has not been fully satisfied for the brand family and the manufacturer. (b) The department shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of this part 3. anding final judgment, including interest thereon, for violations of the tobacco escrow funds act has not been fully satisfied for the brand family and the manufacturer. (b) The department shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of this part 3. (c) The department shall transmit by electronic mail or other practicable means to each stamping agent notice of any addition to or removal from the directory of a tobacco product brand manufacturer or brand family. In addition, the department shall transmit by electronic mail or other practical means to each stamping agent notice of the potential removal from the directory of a tobacco product brand manufacturer or brand family three calendar days before the tobacco product brand manufacturer or brand family is actually removed from the directory. Unless otherwise provided by agreement between a stamping agent and a tobacco product manufacturer, a stamping agent shall be entitled to a refund from a tobacco product manufacturer of any money paid by the stamping agent to the tobacco product manufacturer for any cigarettes of the tobacco product manufacturer still held by the stamping agent on the date of notice by the department of the removal from the directory of the tobacco product manufacturer or the brand family of the cigarettes. The department shall not restore to the directory a tobacco product manufacturer or a brand family until the tobacco product manufacturer has paid the stamping agent any refund due. (d) Every stamping agent shall provide and update as necessary an electronic mail address to the department for the purpose of receiving any notifications that may be required by this part 3. (3) Prohibition against stamping or sale of cigarettes not in the directory. It shall be unlawful for any person to: (a) Affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory; or (b) Sell, offer, or possess for sale in this state cigarettes of a tobacco product manufacturer or brand family not included in the directory.

C.R.S. § 39-28-304 Agent for service of process

39-28-304. Agent for service of process. (1) A nonresident or foreign nonparticipating manufacturer that has not registered to do business in the state as a foreign corporation or business entity shall, as a condition precedent to having its brand families listed or retained in the directory, appoint and continually engage without interruption the services of an agent in the state to act as an agent for the service of process on whom all process, and any action or proceeding against the nonparticipating manufacturer concerning or arising out of the enforcement of this part 3 and the tobacco escrow funds act, may be served in any manner authorized by law. Such service shall constitute legal and valid service of process on the nonparticipating manufacturer. The nonparticipating manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of the agent to and to the satisfaction of the executive director of the department and the attorney general. (2) A nonparticipating manufacturer shall provide notice to the executive director of the department and the attorney general at least thirty calendar days prior to termination of the authority of an agent and shall further provide proof to the satisfaction of the attorney general of the appointment of a new agent at least five calendar days prior to the termination of an existing agent appointment. In the event an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the executive director and the attorney general of the termination within five calendar days and shall include proof to the satisfaction of the attorney general of the appointment of a new agent. (3) A nonparticipating manufacturer whose products are sold in this state without appointing or designating an agent as herein required shall be deemed to have appointed the secretary of state as the agent and may be proceeded against in the courts of this state by service of process upon the secretary of state. However, the appointment of the secretary of state as the agent shall not satisfy the condition precedent to having the nonparticipating manufacturer's brand families listed or retained in the directory.

C.R.S. § 39-28-305 Reporting of information - escrow installments

39-28-305. Reporting of information - escrow installments. (1) Reporting by stamping agents. Not later than twenty days after the end of each month, each stamping agent shall submit to the department such information as the department requires to facilitate compliance with this part 3, including, but not limited to, a list by brand family of the total number of cigarettes, or in the case of roll-your-own, the equivalent stick count for which the stamping agent affixed stamps during the previous calendar month or otherwise paid the tax due for such cigarettes. The stamping agent shall maintain and make available to the department all invoices and documentation of sales of all nonparticipating manufacturer cigarettes and any other information relied upon in reporting to the department for a period of five years. (2) Disclosure of information. The department is authorized to disclose to the attorney general any information received under this part 3 and requested by the attorney general for purposes of determining compliance with and enforcing the provisions of this part 3. The department and the attorney general shall share with each other the information received under this part 3 and may share the information with other federal, state, or local agencies only for purposes of enforcement of this part 3, the tobacco escrow funds act, or corresponding laws of other states. (3) Verification of qualified escrow fund. The attorney general may require at any time from a nonparticipating manufacturer, proof from the financial institution in which the manufacturer has established a qualified escrow fund for the purpose of compliance with the tobacco escrow funds act of the amount of money in the fund, exclusive of interest, being held on behalf of the state, the dates of deposits, and the dates and amounts of all withdrawals from such fund. (4) Requests for additional information. In addition to the information required to be submitted pursuant to regulation number 39-28-202 (3) and (4) or any successor rule of the department (1 CCR 201-7), the department or the attorney general may require a stamping agent, distributor, or tobacco product manufacturer to submit any additional information, including, but not limited to, samples of the packaging or labeling of each brand family, as is necessary to enable the department or the attorney general to determine whether a tobacco product manufacturer is in compliance with this part 3. (5) Quarterly escrow installments. To promote compliance with the provisions of this part 3, the department may promulgate rules requiring a tobacco product manufacturer subject to the requirements of section 39-28-303 (1)(c) to make the escrow deposits required in quarterly installments during the year in which the sales covered by such deposits are made. The department may require production of information sufficient to enable the department to determine the adequacy of the amount of the installment deposit.

C.R.S. § 39-28-306 Penalties and other remedies

39-28-306. Penalties and other remedies. (1) License revocation and civil penalty. In addition to or in lieu of any other civil or criminal remedy provided by law, upon a determination that a stamping agent has violated section 39-28-303 (3) or any rule adopted pursuant thereto, the executive director of the department may revoke or suspend the license of any stamping agent in the manner provided by sections 39-28-102 (1) and 39-28.5-104. Each stamp affixed and each offer to sell cigarettes in violation of section 39-28-303 (3) shall constitute a separate violation. For each violation, the executive director may also impose a civil penalty in an amount not to exceed the greater of five hundred percent of the retail value of the cigarettes sold or five thousand dollars upon a determination of a violation of section 39-28-303 (3) or any rules adopted pursuant thereto. (2) Contraband and seizure. Any cigarettes that have been sold, offered for sale, or possessed for sale in this state in violation of section 39-28-303 (3) shall be deemed a contraband article as defined by section 16-13-502 (1), C.R.S. The cigarettes shall be subject to seizure and forfeiture as provided in the "Colorado Contraband Forfeiture Act", part 5 of article 13 of title 16, C.R.S., and any cigarettes so seized and forfeited shall be destroyed and not resold. (3) Injunction. The attorney general, on behalf of the department, may seek an injunction to restrain a threatened or actual violation of section 39-28-303 (3) or 39-28-305 (1) or (4) by a stamping agent and to compel the stamping agent to comply with those statutory provisions. (4) Unlawful sale and distribution. It is unlawful for a person to sell, distribute, acquire, hold, own, possess, transport, import, or cause to be imported cigarettes that the person knows or should know are intended for distribution or sale in the state in violation of section 39-28-303 (3). A violation of this section is a class 2 misdemeanor. (5) Colorado consumer protection act. A person who violates section 39-28-303 (3) engages in an unfair and deceptive trade practice in violation of section 6-1-105, C.R.S. (6) Disgorgement of profits for violations of this part 3. If a court determines that a person has violated this part 3, the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the state treasurer for deposit into the tobacco control special fund, which is hereby created. Unless otherwise expressly provided, the remedies or penalties provided by this part 3 are cumulative to each other and to the remedies or penalties available under all other laws of this state.

C.R.S. § 39-28-307 Miscellaneous provisions

39-28-307. Miscellaneous provisions. (1) Notice and review of determination. A determination of the department to not list or to remove from the directory a brand family or tobacco product manufacturer shall be subject to review in the manner prescribed by the "State Administrative Procedure Act", article 4 of title 24, C.R.S. (2) Applicants for licenses. No stamping agent for a license shall be issued a license or granted a renewal of a license unless the stamping agent has certified in writing, under penalty of perjury, that the stamping agent has in the past and will continue to comply fully with this part 3. No applicant for a license shall be issued a license unless the applicant has certified in writing, under penalty of perjury, that the stamping agent will fully comply with this section. (3) Repealed. (4) Promulgation of rules. The department may promulgate rules necessary to effect the purposes of this statute. The department shall promulgate such rules in accordance with article 4 of title 24, C.R.S. (5) Recovery of costs and fees by attorney general. In any action brought by the state to enforce this part 3, the state shall be entitled to recover the costs of investigation, expert witness fees, costs of the action, and reasonable attorney fees. (6) Construction and severability. If a court of competent jurisdiction finds that the provisions of this part 3 and of the tobacco escrow funds act conflict and cannot be harmonized, then the provisions of the tobacco escrow funds act shall control. If any provision of this part 3 causes the tobacco escrow funds act to no longer constitute a qualifying or model statute, as those terms are defined in the master settlement agreement, then that portion of this part 3 shall not be valid. If any provision of this part 3 is for any reason held to be invalid, unlawful, or unconstitutional, the decision shall not affect the validity of the remaining portions of this part 3 or any part thereof.

C.R.S. § 39-28-401 Submission of ballot issue - increased tax on cigarettes and tobacco products - new tax on nicotine products - definition

39-28-401. Submission of ballot issue - increased tax on cigarettes and tobacco products - new tax on nicotine products - definition. (1) As used in this section, "ballot issue" means the question referred to voters in subsection (2) of this section. (2) At the election held on November 3, 2020, the secretary of state shall submit to the registered electors of the state for their approval or rejection the following ballot issue: "Shall state taxes be increased by $294,000,000 annually by imposing a tax on nicotine liquids used in e-cigarettes and other vaping products that is equal to the total state tax on tobacco products when fully phased in, incrementally increasing the tobacco products tax by up to 22% of the manufacturer's list price, incrementally increasing the cigarette tax by up to 9 cents per cigarette, expanding the existing cigarette and tobacco taxes to apply to sales to consumers from outside of the state, establishing a minimum tax for moist snuff tobacco products, creating an inventory tax that applies for future cigarette tax increases, and initially using the tax revenue primarily for public school funding to help offset revenue that has been lost as a result of the economic impacts related to COVID-19 and then for programs that reduce the use of tobacco and nicotine products, enhance the voluntary Colorado preschool program and make it widely available for free, and maintain the funding for programs that currently receive revenue from tobacco taxes, with the state keeping and spending all of the new tax revenue as a voter-approved revenue change?" (3) For purposes of section 1-5-407, the ballot issue is a proposition. Section 1-40-106 (3)(d) does not apply to the ballot issue. (4) Repealed.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-39.docxFetched: 10/6/2026