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62% Vape Tax Proposed

A new bill has been proposed by Governor Polis that includes a 62% tax on vapor products, which would result in serious damage to vape shops and vapers all across the state, including increased prices for customers and shops and the closure of a large number of vape shops across the state. Recently, Pennsylvania passed a 40% tax that forced 80% of the state’s vape shops to close. A 62% vape tax in Colorado would likely be just as damaging, if not more, impacting the economy of the state and resulting in a massive number of lost jobs.

Call To Action:

Vapers, Shop Owners, Stakeholders. Please call your representatives. It is critical that our voices be heard. Follow this link to find your representatives:

https://leg.colorado.gov/findmylegislator

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Jordan Helsley
HB 1033 And Its Effects

Update: HB 1033 has passed. This post has been edited to reflect what it means going forward.

What you need to know.

House Bill 1033 was introduced on January 4th, 2019, with the intention to allow local Colorado governments to to impose their own, presumably more strict, laws, as well as higher taxes, on tobacco products. 

It does so by removing the previous restrictions that were in place preventing counties from imposing their own tobacco laws through fiscal penalties. Counties currently have the capability to impose their own taxes, but are not able to access any monies collected by Colorado if they do so, due to the state’s own policy on taxes of tobacco products.

The bill will allow every community to regulate tobacco products differently, as long as they are above Colorado’s state regulations. 

On March 28th, Governor Jared Polis signed an amended version of HB 1033, which still accomplishes the same goals as the initial draft. 

The summary of the bill from Colorado General Assembly is as follows:

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Sections 1, 2, and 4 of the bill authorize a county to enact a resolution or ordinance that prohibits a minor from possessing or purchasing cigarettes, tobacco products, or nicotine products. Sections 1 and 2 also authorize a county to impose regulations on cigarettes, tobacco products, or nicotine products that are more stringent than statewide regulations, including prohibiting sales to a person under 21 years of age, and section 4 expressly authorizes a county to enact a resolution or ordinance regulating the sale of cigarettes, tobacco products, or nicotine products to minors. Section 3 expressly authorizes a statutory or home rule city or town to enact an ordinance regulating the sale of cigarettes, tobacco products, or nicotine products to minors.
From state income tax money, the state currently apportions an amount equal to 27% of state cigarette tax revenues to cities, towns, and counties in proportion to the amount of state sales tax revenues collected within their boundaries. In order to receive their allocation of this money, cities, towns, and counties are prohibited from imposing their own fees, licenses, or taxes on cigarette sales or from attempting to impose a tax on cigarettes. Section 5 removes this prohibition, thus allowing cities, towns, and counties to impose fees, licenses, or taxes on cigarette sales without losing their apportioned state cigarette tax revenues.
Section 6 authorizes a statutory or home rule city or town or a county, if approved by a vote of the people within the statutory or home rule city or town or county, to impose a special sales tax on the sale of cigarettes, tobacco products, or nicotine products and provides a mechanism by which a county's special sales tax applies to a municipality within the boundary of the county unless the municipality, if approved by a vote of the people within the municipality, enacts its own such special sales tax; however, the county and municipality may then enter into an intergovernmental agreement authorizing the county to continue to levy, collect, and enforce its special sales tax within the corporate limits of the municipality.
Section 7 makes a conforming amendment.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

What Does It Mean For You?

While it may not seem immediately impactful, CASAA sums up the larger picture in relation to HB 1033:

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Today, people who smoke (and now the vaping community) are demonized to the point that the power has shifted to public health organizations that lobby against anything connected to tobacco and nicotine–even if it’s new, safer, smoke-free products that could save millions of lives. Allowing local governments to impose stricter regulations on safer alternatives to combustible tobacco is part of a larger strategy to create a patchwork of regulation that forces the legislature to take action and adopt stricter laws that deny access to these products uniformly across the state.

The passing of 1033, which succeeded despite the opposition and final calls for governor Polis to veto the bill, will lead to local battles throughout the state. The first of these battles is an upcoming tobacco 21 proposal in Denver, which appeared immediately after the ink was dry on 1033. The proposal in Denver is only the first of many local bills we will see regarding tobacco 21, taxes, and outright flavor bans, as communities start to craft their own laws. That is to say: our opposition will only increase as we see more of these bills introduced state-wide. 

Jordan Helsley
HB 1076 - Proposed Law and Amendment

What You Need To Know

House Bill 1076 was introduced on January 11th, 2019, and is currently moving through the House. RMSFA was instrumental in crafting amendment L002 to the bill which allows vape shops to continue being vaping-friendly establishments, as long as those shops restrict access to anyone under 18. 

The previous version of the bill was intended to amend the “Colorado Clean Indoor Air Act” in the following ways: (per Colorado General Assembly)

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Adding a definition of "electronic smoking device" (ESD) to include e-cigarettes and similar devices within the scope of the act;
Citing the results of recent research on ESD emissions and their effects on human health as part of the legislative declaration;
Eliminating the existing exceptions for certain places of business in which smoking may be permitted, such as airport smoking concessions, businesses with 3 or fewer employees, designated smoking rooms in hotels, and designated smoking areas in assisted living facilities; and
Repealing the ability of property owners and managers to designate smoking and nonsmoking areas through the posting of signs.
(Note: This summary applies to this bill as introduced.)


What Does It Mean For You?

The largest effect of HB 1076 was the potential for an indoor vaping ban, which would have had an obvious effect on Colorado vape shops. Removing the ability for customers and employees to vape in shops would not only negatively impact the satisfaction of employees and customers, but would also be detrimental to customer service practices such as device support and flavor sampling.  

This was the key point of contention from the RMSFA, and something we felt very strongly about. With the inclusion of our amendment to the bill, vape shops would be allowed to continue their practices of allowing indoor vaping with the caveat that youth access is restricted. 

HB 1076 is currently awaiting final passage in the House, and afterwards will move to the Senate. We will continue monitoring the bill to ensure that no further unfriendly amendments are added. 

In its current form, the RMSFA is in support of HB 1076, as it takes a reasonable step toward limiting youth access without being sensationalist. 

Jordan Helsley