After rolling out their respective tobacco taxes in 2020, Pitkin County and Glenwood Springs have enjoyed a healthy amount of sales tax revenue off the purchase of tobacco and nicotine products locally.
In Glenwood Springs, its voter-approved tobacco tax generated too much money, city officials have estimated.
“I didn’t think that we’d go over $900,000,” Steve Boyd, Glenwood Springs chief operating officer, said. “It came in a little higher than we thought.”
Although still finalizing 2020’s tobacco tax revenue, Boyd believed Glenwood Springs tax brought in $928,000 last year.
Glenwood Springs’ tobacco tax levies $4 on each pack of cigarettes and a 40% tax on all other tobacco and nicotine products sold in the city. Because Glenwood Springs’ ballot question said the tax would collect up to $900,000 in 2020, in accordance with the Taxpayer Bill of Rights, or TABOR, the city must rebate the excess $28,000.
“We’ll do something for the public good,” Boyd said. “We haven’t decided how we are going to do that yet.”
According to City Attorney Karl Hanlon, city council members will ultimately decide how to rebate the $28,000 back into the community.
“The language in TABOR is that you may use any reasonable methods for refunds,” Hanlon said. “I think we’ll probably just present some choices to council and let them decide how they want to proceed.”
When asked why the tax wasn’t temporarily suspended late last year, Hanlon said it was unclear, at the time, whether or not Glenwood Springs’ tobacco tax would exceed $900,000 by year’s end.
“It just looked like we were going to be really close,” Hanlon said. “This is something completely new — for a local jurisdiction to be able to tax tobacco products — and I think that’s why you see so many jurisdictions overshooting.”
Similar to Glenwood Springs, Pitkin County voters also imposed a slightly less $3.20 sales tax on every pack of cigarettes sold in the county beginning Jan. 1, 2020. The tax will increase by 10 cents, annually, until it tacks on $4 to every pack of cigarettes purchased in Pitkin County. In addition to cigarettes, Pitkin County’s tobacco tax levies a 40% sales tax on all other tobacco and nicotine products, too. The ballot issue passed with over 78% of Pitkin County voters supporting it.
However, unlike Glenwood Springs, Pitkin County underestimated — and by quite a bit — how much its tobacco tax would raise in its first year.
Although still calculating the total amount of revenue it generated in 2020, Pitkin County’s tobacco tax brought in over $163,000 between January and October last year alone.
According to the ballot language, Pitkin County estimated its tobacco tax would generate up to $700,000 in 2020.
“The fact is, the allure is so strong,” Greg Poschman, Pitkin County commissioner and Board of Health member, said of the tobacco industry’s advertising campaigns. “The promotion and marketing is so insidious that we do have to be concerned about it, here, for our kids.”
No longer in its first year of collection, Aspen’s tobacco tax generated approximately $301,000 in 2020, according to city of Aspen Finance Director Pete Strecker.
“Regarding how these funds are expended, we have a lookback process before committing these dollars, meaning we do not spend them in the same year we collect them,” Strecker said in an email. “This is intentional, as we wouldn’t want to overcommit and not be able to have the resources to provide to the program they are intended. So, these collections remain in the city coffers as of right now.”