DENVER, Colo.—June 4, 2018—On Friday, June 1, Governor John Hickenlooper vetoed Senate Bill 18-179, a bill seeking to permanently extend a three-year tax credit for premium cigars and other tobacco products that a retailer ships or transports to an out-of-state consumer.
The American Cancer Society Cancer Action Network (ACS CAN) and other members of the Colorado Tobacco-Free Alliance opposed the passage of Senate Bill 18-179. Cigars should be subject to taxation like all other tobacco products – regardless of point of origin or destination - to reduce the deadly and costly burden of tobacco use. The tobacco excise tax credit passed into law in 2015 rewarded the sale of a tobacco product. The Governor’s veto of Senate Bill 18-179 means this tax credit will expire later this summer.
"ACS CAN and our partners are deeply grateful to Governor Hickenlooper for his veto of this legislation,” said R.J. Ours, ACS CAN Colorado government relations director. "Senate Bill 18-179 would have reduced resources for a number of Colorado’s public health programs, including health care for children, tobacco prevention and cessation, and cancer early detection and treatment capabilities provided by the proceeds of the tobacco excise taxes passed in Amendment 35."
Tobacco use is the leading preventable cause of premature death. The regulation of cigars and all tobacco products is a major part of ACS CAN’s comprehensive approach to reducing tobacco use in the United States.
In 2004, Colorado voters passed Amendment 35 to tax cigarettes and all other tobacco products, including cigars and pipe tobacco sold in the state. The 20 percent excise tax on other tobacco products from Amendment 35 is not subject to the Taxpayer Bill of Rights (TABOR) cap. Amendment 35 specifies the use of the resulting tax revenues, with 46 percent used for Colorado’s Children’s Health Program; 19 percent used for community health clinics; 16 percent for tobacco education, prevention and cessation; 16 percent for cancer, cardiovascular and pulmonary disease prevention, early detection and treatment programs; and 3 percent of other health-related programs.
ACS CAN and our partners believe that SB 18-179–and its predecessors House Bill 15-1301 and Senate Bill 18-139—runs counter to the intention of the voters to utilize all the proceeds of the Amendment 35 tobacco excise tax for these specific health purposes. ACS CAN does not believe we should provide the tobacco industry with a business incentive to continue to addict people to their deadly products.
Big Tobacco commonly uses price-discounting and tobacco-tax exemptions as schemes to attract and retain customers, which incentives tobacco use, especially among youth. This strategy has sustained higher tobacco use rates. Colorado’s total excise tax on other tobacco products such as cigars and pipe tobacco is 40 percent of manufacturers’ list price—below the nationwide average 45.5 percent. Less expensive Colorado tobacco products sold out of state via the internet diminish the efforts of those other states to protect the health of their citizens.
About the American Cancer Society Cancer Action Network
ACS CAN, the nonprofit, nonpartisan advocacy affiliate of the American Cancer Society, supports evidence-based policy and legislative solutions designed to eliminate cancer as a major health problem. ACS CAN works to encourage elected officials and candidates to make cancer a top national priority. ACS CAN gives ordinary people extraordinary power to fight cancer with the training and tools they need to make their voices heard. For more information, visit www.fightcancer.org.