Colorado Cigarette License Bond

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Colorado Cigarette License Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Colorado Cigarette License bond.

At a Glance:

  • Lowest Cost: $100 per year or $10 a month
  • Bond Amount: Determined on a case-by-case basis (more on this later)
  • Who Needs It: All licensed cigarette wholesalers operating in Colorado
  • Who Regulates Cigarette Wholesalers in Colorado: The Colorado Department of Revenue (CDOR), Taxation Division
  • Purpose: To ensure the CDOR receives compensation if the cigarette wholesaler fails to pay all necessary taxes or other fees
Colorado Cigarette License Bond Form
Colorado Cigarette License Bond Form


Colorado Revised Statute 39-28-102 requires all cigarette wholesalers operating in the state to obtain a license from the Department of Revenue. The Colorado Legislature enacted the licensing requirement to ensure that cigarette wholesalers do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, cigarette wholesalers must purchase and maintain a surety bond to be eligible for licensure.

What Is the Purpose of the Colorado Cigarette License Bond?

Colorado Revised Statute 39-28-102, Section 1.3, requires all cigarette wholesalers to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to the Department of Revenue should the cigarette wholesaler fail to abide by the regulations outlined in the Colorado Revised Statutes Article 28, Part 1. Specifically, the bond ensures the CDOR receives compensation if the cigarette wholesaler fails to pay all necessary taxes or other fees. In short, the bond is a type of insurance that protects the CDOR if the cigarette wholesaler violates the terms of their license.

How Can an Insurance Agent Obtain a Colorado Cigarette License Bond?

BondExchange makes obtaining a Colorado Cigarette License bond easy. Simply log in to your account and use our keyword search to find the “cigarette license” bond in our database. Don’t have a login? Enroll now, and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How Is the Bond Amount Determined?

According to Colorado Revised Statute 39-28-102, the Cigarette License bond limit must be equal to the wholesaler’s anticipated total monthly purchase of stamps.

Is a Credit Check Required for the Colorado Cigarette License Bond?

Surety companies will run a credit check on the cigarette wholesaler to determine eligibility and pricing for the Colorado Cigarette License bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit,” meaning that the credit check will not affect the applicant’s credit.

How Much Does the Colorado Cigarette License Bond Cost?

The Colorado Cigarette License bond can cost between 2% and 10% of the bond amount per year. Monthly subscription options are also available. Insurance companies determine the rate based on several factors, including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $10,000 requirement.

$10,000 Colorado Cigarette License Bond Cost

Credit Score* Bond Cost (1 Year) Bond Cost (1 month)
720+ $100 $10
680 – 719 $150 $15
650 -679 $200 $20
600 – 649 $400 $40
550 – 599 $750 $75
500 – 549 $1,250 $125

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to years of experience and underlying credit factors contained within the business owner’s credit report.

Who Is Required to Purchase a Colorado Cigarette License Bond?

All wholesalers who are applying for a cigarette license with the Colorado Department of Revenue must purchase and maintain a Cigarette License bond for the entirety of their license period.

Colorado Cigarette License Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How Do Cigarette Wholesalers Obtain a License in Colorado?

Cigarette wholesalers in Colorado must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Department’s Forms and Instructions webpage for details on the process.

License PeriodColorado cigarette licenses expire on June 30th each year.

Step 1 – Purchase Surety Bond

Colorado cigarette wholesalers must purchase and maintain a surety bond for the entirety of their license period.

Step 2 – Complete License Application

The cigarette license application must be filled out and completed electronically via the Department’s Revenue Online portal. Further details and step-by-step instructions on how to apply can be found here.

How Do Cigarette Wholesalers Renew Their Colorado Licenses?

Colorado cigarette licenses expire on June 30th of each year. Applications for renewal are to be completed via the Department’s Revenue Online portal.

What Are the Insurance Requirements for Cigarette Wholesalers in Colorado?

Colorado does not require cigarette wholesalers to purchase any form of liability insurance as a prerequisite to obtaining a license. Wholesalers must purchase and maintain a surety bond.

How Do Colorado Cigarette Wholesalers File Their Bonds?

Cigarette wholesalers in Colorado should submit their completed bond forms, including the power of attorney, electronically when submitting their license applications. The surety bond requires signatures from the surety company and the wholesaler themselves. The surety company should include the following information on the bond form:

  • Legal name and address of the individual buying the bond
  • Surety company’s name 
  • Date the bond is signed

What Can Colorado Cigarette Wholesalers Do to Avoid Claims Made Against Their Bonds?

The best way to avoid a claim against a Colorado Cigarette License bond is to follow all license rules and regulations, specifically paying all taxes and other fees due to the Department of Revenue, Taxation Division.

What Other Insurance Products Can Agents Offer Cigarette Wholesalers in Colorado?

Most reputable cigarette wholesalers will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Colorado Cigarette Wholesaler Customers?

Unfortunately, Colorado does not provide a public list of active cigarette wholesalers in the state. We suggest contacting the Department of Revenue, Taxation Division to obtain a list of licensed cigarette wholesalers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Colorado Cigarette License Bond