2017 CO 41
Colo.2017Background
- Creager Mercantile distributed "Blunt Wraps": moist, pre-formed cigar wrappers made of pulverized/homogenized tobacco (30–48% tobacco), designed to be filled and smoked.
- Colorado imposes a tobacco products tax (two 20% components) that relies on the statutory definition of "tobacco products" in § 39-28.5-101(5).
- That definition lists many tobacco forms and a catchall: "other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or for smoking in a pipe or otherwise."
- Department of Revenue audited Creager, assessed unpaid tobacco-product taxes for Blunt Wrap sales, and issued a regulation explicitly including blunt wraps.
- District court held Blunt Wraps taxable; the court of appeals reversed, finding the statute ambiguous and excluding Blunt Wraps under ejusdem generis and the rule to resolve tax ambiguities for taxpayers.
- Colorado Supreme Court reversed the court of appeals: held Blunt Wraps fall within the plain language of the catchall definition and are taxable; remanded for remaining issues.
Issues
| Issue | Plaintiff's Argument (Creager) | Defendant's Argument (Dept. of Revenue) | Held |
|---|---|---|---|
| Whether Blunt Wraps are "tobacco products" under § 39-28.5-101(5) | Blunt Wraps cannot be smoked "on their own"; they are mere wrappers/delivery devices and thus outside the catchall | Blunt Wraps are a kind/form of tobacco, consumed when smoked, and are "prepared ... suitable for ... smoking" so they fall within the catchall | Yes — Blunt Wraps are tobacco products under the statute's plain language; taxable |
| Whether the statute is ambiguous as applied to Blunt Wraps | The statutory phrase "suitable for ... smoking" reasonably requires ability to be smoked independently; ambiguous → resolve for taxpayer | The statute is clear and broad; no ambiguity; plain language controls | No ambiguity — court applied plain meaning and did not resort to canons favoring taxpayer |
| Proper application of ejusdem generis to the catchall clause | The catchall should be limited to items of the same class (consumable as a focus) so blunt wraps—being wrappers—are excluded | The catchall term is expansive and not limited to items consumable independent of other matter | Ejusdem generis does not exclude Blunt Wraps; plain text governs and includes them |
| Whether court may read in a requirement that products be "smoked on their own" | Such requirement must be read into statute to exclude Blunt Wraps | No added requirement; statute covers products "suitable ... for smoking in a pipe or otherwise" including combinations | Court refused to add words; declined to read an "on their own" requirement into the statute |
Key Cases Cited
- Hibbs v. Colo. Dep’t of Revenue, 122 P.3d 999 (Colo. 2005) (statutory construction reviewed de novo; ascertain legislative intent)
- Nieto, 993 P.2d 493 (Colo. 2000) (look first to plain language to determine legislative intent)
- Freeman, 375 P.3d 111 (Colo. 2016) (when statutory language is clear, apply words as written)
- Zapotocky, 869 P.2d 1234 (Colo. 1994) (no resort to interpretive rules where statute is unambiguous)
- Leanin’ Tree, 72 P.3d 361 (Colo. 2003) (tax provisions construed narrowly in favor of taxpayer; not extended by analogy)
- Winter v. People, 126 P.3d 192 (Colo. 2006) (ejusdem generis: general terms following a list apply only to the same class)
- Davidson v. Sandstrom, 83 P.3d 648 (Colo. 2004) (general word following specific list interpreted to include only same type)