A retailer who purchases excise-tax paid tobacco products for sale to the end consumer must have a retail sales tax license when purchasing product from a licensed Colorado tobacco wholesaler/distributor or distributing subcontractor, and will collect and file the sales tax with the Department of Revenue. The retailer is NOT required to have a tobacco products tax license.
If the retailer has a business location (site) in a home-rule city, the retailer is required to contact that city to comply with the city's licensing and tax requirements. See the publication DR 1002 for a list of Colorado home-rule cities.
- If your business purchases tobacco products from a Colorado licensed tobacco products distributor who already paid the Colorado tobacco products excise tax, then you do not need to apply for a tobacco products distributor license. See the Tobacco Products web page for more on the definition of tobacco products.
- If your business purchases tobacco products from an unlicensed distributor, then you are required to obtain a Colorado tobacco products distributor license, and are responsible for the tobacco products excise tax due. Refer to the Tobacco Products Distributors web page for more information on obtaining a tobacco products distributor license.
All retailers selling cigarettes, tobacco products, and nicotine products within Colorado are now required to obtain a Cigarette, Tobacco Product, or Nicotine Product Retailer License through the Liquor and Tobacco Enforcement Division. Apply for the license at SBG.Colorado.gov.
Sales Tax
Retailers must charge the state sales tax on all retail sales of tobacco products and file a Colorado sales tax return. Sales of tobacco products are also subject to county, city and special district sales taxes. Review the Sales & Use Tax web pages to learn more.
Retail Cigars, Hookah & Other Tobacco Products
If the store purchases tobacco products, tax-paid, from a Colorado licensed tobacco products distributor, then a Colorado tobacco products license is not necessary. The Licensed Distributor Lists are updated by the department within seven days of a change to the report.
If the store purchases tobacco products from unlicensed distributors, then a Colorado tobacco products distributor license is required, and the store is responsible for the tobacco products excise tax due. Refer to the Tobacco Products Distributors web page for more information on obtaining a tobacco products distributor license.
Hookah Bars
If the bar acquires hookah (shisha) from a Colorado licensed tobacco products distributor who has paid the excise tax, a tobacco products distributor license is not needed. The Licensed Distributor Lists are updated by the department within seven days of a change to the report.
If the bar orders its hookah (shisha) from an out-of-state, unlicensed distributor or manufacturer, then a Colorado tobacco products distributor license is required, and it is responsible for the tobacco products excise tax due. Refer to the Tobacco Products Distributors web page for more information on obtaining a tobacco products distributor license.
Roll-Your-Own Cigarette Making Machine
Due to the passage of the 2012 federal highway bill (MAP-21), any person who makes available to consumers a machine capable of making tobacco products such as cigarettes is considered a manufacturer on the federal level and must be licensed by the Tobacco and Trade Bureau. Once federal requirements have been met, the owner must certify the product through the Colorado Attorney General's Office.
Excise Tax Due for Orders Made Over the Internet or by Mail-Order
Complete the Tobacco Products Tax Return for Unlicensed Activity, DR 0225 and submit payment within 30 days of receipt of the product. To file the return electronically, send the completed DR 0225 form to DOR_ExciseTax@state.co.us, and payment instructions will follow. To file and pay by mail, follow the instructions for submission and payment stated on the form. Payments can also be made through your Revenue Online account. If you do not have an account with Revenue Online, you can still make an electronic payment from this website. Click Make A Payment under the Payment Options heading, and follow the instructions for your payment method of choice.
To avoid being responsible for the excise tax, do not purchase tobacco products from unlicensed sellers. Only purchase tobacco products from a licensed Colorado retail establishment or from a licensed tobacco products distributor. A current list of licensed distributors can be found at Tax.Colorado.gov/licensed-distributors.
Signs & Warning Posters
Contact the Liquor and Tobacco Enforcement Division, for an information packet.