Nicotine Products Tax
E-cigarettes, vapes, nicotine pouches, and other products which contain nicotine, but do not contain tobacco, are subject to a nicotine products tax. The tax is a percentage of the manufacturer’s list price. A nicotine product is a product that contains nicotine derived from tobacco or created synthetically that is intended for human consumption, whether by vaporizing, chewing, smoking, absorbing, dissolving, inhaling, snorting, sniffing, aerosolizing, or by any other means and is not a cigarette, a tobacco product as defined in section 39-28.5-101(5), C.R.S., or a drug, device or combination product authorized for sale by the US Department of Health and Human Services, as defined in the Federal Food, Drug and Cosmetic Act 21 U.S.C. Sec. 301 et seq.
A modified risk nicotine product is a nicotine product for which the Department of Health and Human Services has issued an order authorizing the product to be commercially sold as a modified risk product in accordance with 21 U.S.C. sec. 387k et seq. More information is available at FDA.gov.
Use the tax rate from the table below for your reporting period:
|Calendar Year 2021||30%||15%|
|Calendar Year 2022||35%||17.5%|
January 1, 2023 through
June 30, 2024
July 1, 2024 through
June 30, 2027
|July 1, 2027 and later||62%||31%|
Untaxed Nicotine Products
Anyone in possession of nicotine products on which the excise tax is not paid by a Colorado licensed distributor must pay the Colorado excise tax within 30 days of receiving the product in the state. This includes nicotine products such as e-cigarettes and other vaping products ordered on the internet, by mail, or by phone.
Payment can be made with the Nicotine Products Tax Return for Unlicensed Activity (DR 0226). Colorado statutes state that failure to pay the excise tax within 30 days can result in a 500% penalty, plus tax and interest. Nicotine products are also subject to sales or use taxes. Payment of the tax does NOT change the existing requirement that the first person or entity to bring any nicotine product into Colorado must be licensed as a nicotine products distributor.