Smokers would have to cough up more tax per pack under a bill that won initial approval in the House on Tuesday.
House Bill 1342 would, for two years, remove the sales-tax exemption on cigarettes, generating an additional $30 million a year.
The state currently has only an excise tax on cigarettes of 84 cents per pack. Some estimates say that allowing the state’s 2.93 percent sales tax on cigarettes would add about 13 cents per pack.
Supporters said the money from removing the exemption is needed to help balance the state’s budget, and unlike general sales taxes, cigarette sales taxes can be avoided.
“It is, in that sense, an optional tax,” said Rep. Daniel Kagan, D-Cherry Hills Village, a co-sponsor of the bill.
Republicans, though, argued the bill was nothing more than a tax increase — violating the Taxpayer’s Bill of Rights in the state constitution.
However, the Colorado Supreme Court earlier this year said lawmakers can eliminate tax exemptions and tax credits as long as the amount of revenue raised does not exceed an overall TABOR revenue limit.
“If it walks like a tax and sounds like a tax, it is,” said Rep. Larry Liston, R-Colorado Springs. “This is a tax increase. You can call it what you want.”
And using a traditionally Democratic line on taxation, some Republicans said the tax was regressive.
“We are balancing our budget on the backs of those who can least afford it,” said Rep. Cheri Gerou, R-Ever green.
The bill passed on a voice vote. The House must approve it once more before it can go to the Senate.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
