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Cigarette Tax -- Quick Answers
Unstamped cigarettes, cigarettes not certified to be sold in Colorado, cigarettes that are not fire-safe and cigarettes not to be sold in the U.S. are all considered contraband.
Penalty -- Unstamped Cigarettes
Every pack of cigarettes sold to consumers in Colorado must have a stamp affixed to the bottom of the pack. Cigarettes that do not have a stamp affixed are contraband (illegal). Unstamped cigarettes not in the possession of a licensed cigarette distributor is subject to a penalty of twenty-five cents per cigarette.
Taxability of Electronic Cigarettes (e-cigarettes)
E-cigarettes that do not contain any tobacco are not subject to the tobacco excise tax, however sales tax does apply to the purchase.
Per statute, cigarette distributors who have a surety bond are allowed to reduce the bond amount by 20 percent annually if they have not had a cigarette tax delinquency in the previous year. The department sends out a letter before the renewal of the cigarette licenses regarding a licensee's bond status.
The cigarette excise tax in Colorado is 4.2 cents per cigarette and is represented by a $0.84 or $1.05 stamp depending on the number of cigarettes in the pack. The wholesaler affixes the tax stamp on each pack of cigarettes sold, and this indicates the cigarette excise taxes have been paid.
Cigarette stamps are available to licensed wholesalers (
see Cigarette Tax | Account
) from the Department of Revenue in 20 cigarettes per stamp rolls, wide 20 count rolls, 20 count sheets and 25 cigarette per stamp rolls. Licensed distributors may order cigarette stamps by calling the Department of Revenue at 303-866-2570.
Shipping of cigarette tax stamps must be paid by the distributors.
The distributors must provide to the department their carrier of choice and their account number for the carrier. The department will include a “Cigarette Tax Shipment Advice” along with each order of cigarette tax stamps. It should be retained because the information on it will be used in completing the
cigarette tax return
Cigarette stamps cannot be transferred or sold between wholesalers.
Due Date for Cigarette Stamp Orders
The date the stamp order is received by the department determines the due date for cigarette stamps, not shipment or receipt date. This information is found in the cigarette tax shipment invoice letter that is delivered with the stamps.
Renewing a License
Along with the renewal form and payment, documents required for license renewal include:
any unfiled MSA documents (
Licensed Distributor Reporting Form (DR 1285)
Tobacco Distributor's Certificate of Exemption (DR 1286
any unfiled tax returns
payment of outstanding debt(s) due to the department
a bond, if required, and
a letter of evidence from a distributor that supplies product to the licensee. The product should either be from a participating manufacturer or a manufacturer who remits escrow to an applicable Colorado tobacco escrow account.
PACT Act requirements
Federal law under the PACT Act states that distributors selling tobacco products, in interstate commerce, into Colorado, which includes sales into Indian Reservations located in Colorado, are required to file the
PACT Act registration form
. In addition, distributors are required to file by the 10th day of the month a memorandum or a copy of the invoice covering every shipment of cigarettes, roll your own (RYO), and smokeless tobacco made into Colorado during the previous month. Submit these reports to the Department via web message through your Revenue Online account, or at
Penalty - Unstamped (contraband) Cigarettes
Every pack of cigarettes sold to consumers in Colorado must have a stamp affixed to the bottom of the pack. Cigarettes that do not have a stamp affixed are contraband (illegal). Unstamped cigarettes not in the possession of a licensed cigarette distributor may be seized and is subject to a penalty of twenty-five cents per cigarettes.
Retailers do not need a cigarette license to sell cigarettes to the end consumer. The retailer must have a sales tax license to purchase Colorado stamped cigarettes from a licensed Colorado distributor and remit state sales tax.
Selling Cigarettes Not on the Certified Brands Directory list
Before you start selling cigarettes that are not on the
Certified Brands Directory
, contact the Tobacco Settlement Section of the Attorney General's Office at (720) 508-6218 for more information.
Cigarette File webpage
Unstamped Cigarettes or Untaxed Tobacco Products Penalty Charges
When purchasing cigarettes, ensure that the packs have Colorado cigarette tax stamps affixed. Effective August 5, 2009, every retailer who is not a licensed tobacco products distributor must keep at its place of business complete and accurate records to show that all tobacco products received by the retailer were purchased from a licensed distributor.