Cigarette Distributors

Along with the renewal form and payment, documents required for license renewal include:

  • Proof that you have a valid sales tax license
  • Any unfiled MSA documents (Licensed Distributor Reporting Form (DR 1285) or 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 reporting, if required, must be current.

Cigarette distributors who have a surety bond are allowed to reduce the bond amount by 20% 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.

Colorado Cigarette Distributors must file a Cigarette Tax Return electronically each month. To file a Cigarette Tax Return, visit Revenue Online. The return must be filed and the payment, which is required to be made by Electronic Funds Transfer (EFT), must be submitted by the 10th day of the month following the month in which stamps were ordered (example: for stamps ordered between July 1 and July 31, the payment is due on August 10).

Distributors must file a return even if no tax is due for that month. Effective January 1, 2021, the amount paid to the Department may be reduced by 0.2680% for cigarettes that are not modified risk tobacco products and 0.2016% for cigarettes that are modified risk tobacco products. This discount of the tax due covers the distributor's expense in the collection and remittance of the tax (discount) if the refund is filed and payment made by the due date.

Cigarette Distributors are also required to file Master Settlement Agreement (MSA) reports monthly or annually. For more information on MSA reporting, see the Master Settlement Agreement Reporting web page.

The return is due on the 10th day of the month following the reporting period. Payment is required to be made by Electronic Funds Transfer by 4:00 p.m. Mountain Time on return's due date. For example, stamps ordered July 5th would have payment due before 4:00 p.m. August 10th.
 

For Cigarette Tax Returns, distributors are required to keep true and accurate records of their activities for at least three years after filing their returns.

For Master Settlement Agreement (MSA) reporting, distributors must keep their records for at least five years.

Federal law under the PACT Act states that distributors selling cigarettes, electronic nicotine delivery systems (ENDS) or tobacco products in interstate commerce, into Colorado are subject to a number of registration, labeling, delivery, tax, reporting and record-keeping requirements including registering and reporting under the PACT Act. For more information, visit the PACT Act Requirements web page. 

Credit will be given by the Department for cigarette taxes on unsalable merchandise when the cigarettes have been returned to the manufacturer. A manufacturers' credit invoice must be attached to the return to substantiate the credits claimed. If credits exceed the amount of cigarette tax due, or a zero return is filed, a Claim for Refund (DR 0137) must be submitted to request a refund.

A refund of any unused or damaged stamps by the distributor will only be allowed if the stamps are returned within one year after the date of issue by the Department. The unused or damaged stamps for which a refund is being claimed must be submitted with a separate DR 0137.

Credit is given by the department to a wholesaler for taxes paid on cigarettes that are bad debts. The credit is prohibited unless the bad debt has been charged off as uncollectible on the books of the distributor. The distributor will be required to repay the credit if payment is received for the bad debt subsequent to receiving the credit. The credit will be processed as a refund on the DR 0137.

If the credit exceeds the amount of tax for the period, the excess credit can be claimed and refunded from the period in which the tax was incurred. A Claim for Refund (DR 0137) must be submitted, along with supporting documentation, to request a refund.

Send form DR 0137, along with supporting documentation through your Revenue Online account via web message, or mail to:

Colorado Department of Revenue
Excise Tax Accounting Section, Room 237
P.O. Box 17087
Denver, CO 80217-0087