Colorado Lawmakers Debate Bill That Would Make It Easier For Cities To Tax And Regulate Cigarettes

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Originally published on February 6, 2019 5:04 pm

Last year, the town of Avon got little resistance from its residents when it asked them to approve a $3 tax on every pack of cigarettes sold in the town.

Town Council member Scott Prince said it was supported by more than 70 percent of voters.

"There was zero campaigning done on behalf of that tax measure," Prince said. "It really speaks volumes about the residents and how much people see the impacts of tobacco and cigarette products."

But the moment the tax passed, Avon also gave up its right to collect a $43,000 check from the state each year. It's the town's share of a state sales tax on cigarettes that is only given to communities that don't have their own taxes on the products.

That's why State Rep. Kerry Tipper is sponsoring a bill to do away with the penalties for municipalities choosing to tax or regulate cigarettes.

"It has a silencing effect," Tipper said. "As we have cities and constituents concerned about e-vaping, what you see is that local governments are treating similar products differently. They will not tax or license cigarettes for fear of losing the share back, but they will license or ask voters to tax other tobacco products. So we have this patchwork created out of a system that favors the tobacco industry and elevates cigarettes in this privileged category."

Tipper's bill would let counties pursue taxes and regulations on cigarettes for the first time. Prince thinks that would be especially beneficial for Avon. Not only would it lead to more tax revenue, but Eagle County could also pass sales restrictions on cigarettes.

"Our three county commissioners were really supportive of what Avon did," Prince said.

The legislation also has support from the town of Carbondale, which recently raised the minimum age for purchasing tobacco products from 18 to 21.

Town trustee Erica Sparhawk said the bill would help Carbondale fine and penalize business owners that violate the new rules.

"If we were to implement licensing, which this bill would allow, that would give us one more kind of reprimand on entities that fail compliance when we do compliance checks," Sparhawk said.

But the change could be costly for business owners. Lawmakers estimate a licensing fee could range from $250 to $500. That concerns Brian Reed, who owns Edward's Pipe and Tobacco Shop in Englewood.

"It's death by a thousand papercuts," he said at a hearing on the bill. "$500 doesn't seem like a bunch of money but it just starts there, and it continually goes up. That's my response. We have a lot of taxes already that didn't exist 100 years ago, and it never goes away."

Several other tobacco retailers testified against the bill at a hearing last week. They said they'd rather see the state have a uniform set of regulations. The bill was also criticized by Republicans on the Health and Insurance committee.

Rep. Colin Larson, of Littleton, doesn't think the bill goes far enough.

"I think we need a statewide licensure scheme," Larson said. "I think we need a statewide age of purchase increase."

Tipper acknowledged the concerns about her bill, but said something needs to be done right now.

"There are two proven policies that not only reduce youth tobacco use but also support adult cessation efforts … and those two policies are increasing unit prices on tobacco products and requiring, licensing and regulating the sale of those tobacco products," Tipper said.

And while it generated discussion about a teen vaping epidemic in Colorado, Tipper's bill won't change regulations on e-cigarettes. Cities and counties already have the authority to tax and regulate those products without fearing any penalty from the state.

The bill passed on a party line vote and also advanced out of the Democratic-controlled House. It now heads to the Senate for debate.

Capitol Coverage is a collaborative public policy reporting project, providing news and analysis to communities across Colorado for more than a decade. Eleven public radio stations participate in Capitol Coverage from throughout Colorado.

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