SB26-086 • 2026

Reduce Premium Cigar Excise Tax Rate

Effective July 1, 2026, the bill defines "premium cigar" and reduces the statutory excise taxation rate on premium cigars to 20% of the manufacturer's list price (MLP) from the current rates for all n

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Sen. T. Sullivan
Last action: 2026-03-03
Official status: Senate Committee on Finance Postpone Indefinitely
Effective date: Not listed

Plain English Breakdown

The bill summary provided does not specify if there are any amendments that have been adopted since introduction.

Lower Tax on Premium Cigars

This bill reduces the tax rate for premium cigars to 20% starting July 1, 2026.

What This Bill Does

Defines a 'premium cigar' as one rolled by hand with whole tobacco leaves and without filters or mouthpieces.
Reduces the excise tax on premium cigars from current rates of 36% to 42%, depending on the date, to 20% starting July 1, 2026.

Who It Names or Affects

Manufacturers and sellers of premium cigars
People who buy premium cigars

Terms To Know

Premium Cigar: A cigar that is hand-rolled, uses whole tobacco leaves, and does not have filters or mouthpieces.
Excise Tax: A tax on specific goods like premium cigars.

Limits and Unknowns

The bill does not affect the state constitution's additional 20% tax on premium cigars.
It only applies to sales, use, consumption, handling, or distribution of premium cigars after July 1, 2026.

Bill History

2026-03-03 Senate
Senate Committee on Finance Postpone Indefinitely
2026-02-10 Senate
Introduced In Senate - Assigned to Finance

Official Summary Text

Effective July 1, 2026, the bill defines "premium cigar" and reduces the statutory excise taxation rate on premium cigars to 20% of the manufacturer's list price (MLP) from the current rates for all non-cigarette tobacco products other than moist snuff of 36% of the MLP from July 1, 2024, through June 30, 2027, and 42% of the MLP on and after July 1, 2027, effectively rolling back the increases in the statutory taxation rate for such tobacco products since 2005. The bill does not affect taxation of premium cigars under the state constitution, which imposes an additional 20% tax.
(Note: This summary applies to this bill as introduced.)

Current Bill Text

Read the full stored bill text

Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 26-0702.01 Stephanie Schrab x4330 SENATE BILL 26-086
Senate Committees House Committees
Finance
A BILL FOR AN ACT
CONCERNING THE TAXATION OF PREMIUM CIGARS , AND , IN101
CONNECTION THEREWITH, CAPPING THE STATUTORY EXCISE TAX102
ON PREMIUM CIGARS AT TWENTY PERCENT.103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
Effective July 1, 2026, the bill defines "premium cigar" and
reduces the statutory excise taxation rate on premium cigars to 20% of the
manufacturer's list price (MLP) from the current rates for all non-cigarette
tobacco products other than moist snuff of 36% of the MLP from July 1,
2024, through June 30, 2027, and 42% of the MLP on and after July 1,
SENATE SPONSORSHIP
Sullivan,
HOUSE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
2027, effectively rolling back the increases in the statutory taxation rate
for such tobacco products since 2005. The bill does not affect taxation of
premium cigars under the state constitution, which imposes an additional
20% tax.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 39-28.5-101, add2
(9.5) as follows:3
39-28.5-101. Definitions.4
As used in this article 28.5, unless the context otherwise requires:5
(9.5) "PREMIUM CIGAR" MEANS A CIGAR THAT IS ROLLED BY HAND,6
HAS A WRAPPER MADE OF WHOLE TOBACCO LEAVES, AND DOES NOT HAVE7
A FILTER OR A MOUTHPIECE.8
SECTION 2. In Colorado Revised Statutes, 39-28.5-102, amend9
(1) introductory portion; and add (6) as follows:10
39-28.5-102. Tax levied.11
(1) Except as set forth in subsection (3) SUBSECTIONS (3) AND (6)12
of this section, there is levied a tax upon the sale, use, consumption,13
handling, or distribution of all tobacco products in this state, excluding14
modified risk tobacco products, at the rate of:15
(6) T HE TAX IMPOSED UPON THE SALE , USE , CONSUMPTION ,16
HANDLING, OR DISTRIBUTION OF PREMIUM CIGARS PURSUANT TO17
SUBSECTION (1) OF THIS SECTION IS TWENTY PERCENT OF THE18
MANUFACTURER'S LIST PRICE OF THE PREMIUM CIGARS.19
SECTION 3. Effective date - applicability. This act takes effect20
July 1, 2026, and applies to the sale, use, consumption, handling, or21
distribution of premium cigars on or after said date.22
SECTION 4. Safety clause. The general assembly finds,23
SB26-086-2-
determines, and declares that this act is necessary for the immediate1
preservation of the public peace, health, or safety or for appropriations for2
the support and maintenance of the departments of the state and state3
institutions.4
SB26-086-3-