A last-minute proposal to create a vaping tax and increase Colorado's tax on tobacco products has moved one step closer to the ballot.
A House committee on Friday approved a measure supporters say will combat the state's teen vaping epidemic.
Members of the House Finance Committee voted mostly along party lines to advance House Bill 1333, which will ask voters in November to decide whether to boost taxes on cigarettes and vaping products by an estimated $300 million annually.
The revenue would fund health care programs, expanded preschool and after-school activities.
Sponsored by state Rep. Yadira Caraveo, D-Thornton, and state Sen. Rhonda Fields, D-Aurora, the bill would increase the tax on a pack of cigarettes from 84 cents to $2.59 and raise the tax on other tobacco products from 40% to 62%. It would also establish a 62% tax on nicotine liquid used in e-cigarettes and vaping devices.
"The prime part of this bill is changing the price point for young people and trying to reduce the effects for young people," said Caraveo, a pediatrician and the legislature's only medical doctor.
Caraveo said Colorado likely ranks first in the nation for teen vaping because the cost of e-cigarettes is so low in the state — just $1 for vaping liquid equivalent to the nicotine in a pack of cigarettes, which cost around $5.60 on average, including excise taxes.
"As a pediatrician, I understand the negative consequences nicotine has on brain development and the health of our young people," she added.
But owners of vaping stores say imposing a 62% tax on their product will put them out of business by driving their customers to online retailers, who don't have to charge the same tax.
Several store owners told the House panel that slapping such a high tax on their product will also discourage adults from using vaping to quit more harmful tobacco cigarettes.
"We are not big tobacco, we are not in the business of hooking kids on nicotine. We go out of our way to make sure our stores are not the source where kids are getting vape products," testified Amanda Wheeler, owner of two JVape stores in Colorado and vice president of the Rocky Mountain Smoke Free Alliance
"We want to help adults get off of cigarettes," she said. "We do not want to be an on-ramp for kids to get addicted to nicotine."
Before joining his fellow Republicans on the panel to vote against the bill, state Rep. Shane Sandridge, R-Colorado Springs, reminded lawmakers that state voters rejected a proposed cigarette tax increase in 2016.
"We do have a problem, but voters did weigh in on this on a similar matter and struck it down," Sandridge said.
"Any time you want to put a business out of business, tax the heck out of them," he added. "I understand there's a problem; I just don't feel this is the best way to solve it."
The Democratic-controlled committee voted 6-5 to send the bill on to the House Appropriations Committee, with state Rep. Tom Sullivan, D-Centennial, the only Democrat to vote against it.
Before the final vote, Sullivan tried unsuccessfully to amend the bill to exempt premium cigars from the tobacco tax increase, arguing that in-state cigar shops have already lost substantial business to online retailers.
The Appropriations Committee is scheduled to hear the bill Monday.