(Name of Registrant as Specified In Its Charter)

SCOTT’S LIQUID GOLD-INC.
4880 Havana Street
Denver, Colorado 80239

NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
To Be Held May 3, 2006

TO OUR SHAREHOLDERS:

     The Annual Meeting of Shareholders of Scott’s Liquid Gold-Inc., a Colorado corporation (the “Company”), will be held at 9:00 a.m., Mountain Time, on Wednesday, May 3, 2006 at the Company’s offices, 4880 Havana Street, Denver, Colorado for the purpose of considering and acting upon the following:

	(1)		The election of seven directors;
	(2)		Such other matters as may properly come before the meeting or any adjournment thereof.

     Only shareholders of record at the close of business on March 14, 2006 are entitled to notice of and to vote at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Dennis P. Passantino
Corporate Secretary

Denver, Colorado
March 29, 2006

THE FORM OF PROXY IS ENCLOSED. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE PREPAID, ADDRESSED ENVELOPE. NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.

SCOTT’S LIQUID GOLD-INC.
4880 Havana Street
Denver, Colorado 80239

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 3, 2006

     The enclosed Proxy is solicited by and on behalf of the Board of Directors of Scott’s Liquid Gold-Inc., a Colorado corporation (the “Company”), for use at the Company’s Annual Meeting of Shareholders to be held at 9:00 a.m., Mountain Time, on Wednesday May 3, 2006 at the Company’s offices, 4880 Havana Street, Denver, Colorado, or any adjournment thereof. This Proxy Statement and the accompanying form of Proxy are first being mailed or given to the shareholders of the Company on or about March 29, 2006.

     Any shareholder signing and mailing the enclosed Proxy may revoke it at any time before it is voted by giving written notice of the revocation to the Company’s Corporate Secretary, by voting in person at the meeting or by filing at the meeting a later executed proxy.

VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

     All voting rights are vested exclusively in the holders of the Company’s $0.10 par value common stock. Each share of the Company’s common stock is entitled to one vote. Cumulative voting in the election of directors is not permitted. Holders of a majority of shares entitled to vote at the meeting, when present in person or by proxy, constitute a quorum. On March 14, 2006, the record date for shareholders entitled to vote at the meeting, the Company had 10,503,000 shares of its $0.10 par value common stock issued and outstanding.

     When a quorum is present, in the election of directors, those seven nominees having the highest number of votes cast in favor of their election will be elected to the Company’s Board of Directors. Consequently, any shares not voted (whether by abstention, broker non-vote or otherwise) have no impact in the election of directors except to the extent the failure to vote for an individual results in another individual receiving a larger number of votes.

     The following persons are the only persons known to the Company who on March 14, 2006, owned beneficially more than 5% of the Company’s common stock, its only class of outstanding voting securities:

Name and Address of		Amount and Nature of				Percent
Beneficial Owner		Beneficial Ownership				of Class
Mark E. Goldstein 4880 Havana Street Denver, Colorado 80239			2,817,365	(1)(2)			26.3	%
Scott’s Liquid Gold-Inc. Employee Stock Ownership Plan 4880 Havana Street Denver, Colorado 80239			1,236,023	(3)			11.8	%
Atchison Investments Limited and Gregory Butcher 235 Main Street Gibraltar (4)			743,496	(4)			7.1	%

SECURITY OWNERSHIP OF MANAGEMENT

     The following table shows as of March 14, 2006, the shares of the Company’s common stock beneficially owned by each director and executive officer of the Company and the shares beneficially owned by all of the directors and executive officers as a group:

		Amount and Nature of				Percent
Name of Beneficial Owner		Beneficial Ownership (1)				of Class
Mark E. Goldstein			2,817,365	(2)(3)(4)			26.3	%
Jeffrey R. Hinkle			349,278	(3)(4)(5)			3.3	%
Jeffry B. Johnson			235,400	(3)(4)(6)			2.2	%
Dennis P. Passantino			228,400	(3)(4)			2.1	%
Carl A. Bellini			141,300	(3)			1.3	%
Dennis H. Field			173,500	(3)			1.6	%
Gerald J. Laber			90,000	(3)			.8	%
All Directors and executive officers as a Group (seven persons)			4,035,243	(3)(4)			34.4	%

     There has been no change in control of the Company since the beginning of the last fiscal year, and there are no arrangements known to the Company, including any pledge of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION

Nominees

     The Company’s Board of Directors consists currently of seven directors. Unless authority to vote is withheld, the persons named in the enclosed form of proxy will vote the shares represented by such proxy for the election of the seven nominees for director named below. If, at the time of the Meeting, any of these nominees shall have become unavailable for any reason to serve as a director, the persons entitled to vote the proxy will vote for such substitute nominee or nominees, if any, as they determine in their discretion. If elected, the nominees for director will hold office until the next annual meeting of shareholders or until their successors are elected and qualified. The nominees for director, each of whom has consented to serve if elected, are as follows:

Name of Nominee and						Director				Principal Occupation for
Position in the Company		Age				Since				Last Five Years
Mark E. Goldstein (Chairman of the Board, President and Chief Executive Officer)			50				1983			Chairman of the Board of the Company since February 22, 2000, President and Chief Executive Officer of the Company since August, 1990. From 1982 to 1990, Vice President-Marketing of Company. Employed by the Company since 1978.
Jeffrey R. Hinkle (Vice President — Marketing and Sales)			52				2000			Vice President-Marketing and Sales of the Company since February 2000. Vice President of Marketing and Sales for the Company’s subsidiaries from November 1992 to 2000. Employed by the Company since 1981.
Jeffry B. Johnson (Treasurer and Chief Financial Officer)			60				2000			Treasurer and Chief Financial Officer of the Company since November 2000. From 1981 to 2000, Controller of Company. Employed by the Company since 1976.
Dennis P. Passantino (Vice President — Operations and Corporate Secretary)			50				2002			Vice President — Operations and Corporate Secretary since November 2002. From 1991 to 2002, Operations Manager. Employed by the Company since 1981.
Carl A. Bellini			72				2000			Management Consultant since 1997. From 1987 to 1997, Executive Vice President and Chief Operating Officer of Revco D.S., Inc. (a large drug store chain).
Dennis H. Field			73				1991			Management Consultant since 1990. From 1984 to 1990, Executive Vice President/General Manager, Faberge USA, Inc. (mass market health and beauty aids).
Gerald J. Laber, CPA			62				2004			Director since January, 2004. Investor and community volunteer since 2000. From 1980 to 2000 partner with Arthur Andersen L.L.P.; director with Applied Films Corporation, Boulder Specialty Brands, Inc., Qualmark Corporation, and Spectralink Corporation.

     All of the foregoing persons are currently directors of the Company. Their positions on standing committees of the Board of Directors are shown below under “Directors’ Meetings and Committees”.

     The Company’s only executive officers are those who are described in the foregoing table. The officers of the Company are elected annually at the first meeting of the Company’s Board of Directors held after each annual meeting of shareholders and serve at the pleasure of the Board of Directors.

     There are no family relationships among the executive officers or directors of the Company. There are no arrangements or understandings pursuant to which any of these persons were elected as an executive officer or director.

Directors’ Meetings and Committees

     During the year ended December 31, 2005, the Company had six directors meetings plus five actions by unanimous written consent. The Company’s Board of Directors has both a Compensation Committee and an Audit Committee. The Company does not have a nominating committee.

     The primary responsibilities of the Compensation Committee include development of an executive compensation philosophy for the Company; origination of all executive compensation proposals; review of the appropriate mix of variable versus fixed compensation; and review of all transactions between the Company and any executive officer or director, whether or not involving compensation. The Committee consists currently of three outside directors of the Company and, in addition, the President of the Company. Current members of the Compensation Committee are Dennis H. Field (Chairperson), Carl A. Bellini, Gerald J. Laber, and Mark E. Goldstein (with Mr. Goldstein having no vote). The Compensation Committee had four meetings plus one action by unanimous written consent during 2005.

     The Audit Committee has as its primary responsibilities the appointment of the independent auditor for the Company, the pre-approval of all audit and non-audit services, and assistance to the board of directors in monitoring the integrity of the financial statements of the Company, the independent auditor’s qualifications, independence and performance and the Company’s compliance with legal requirements. The Audit Committee operates under a written charter adopted by the board of directors, a copy of which was attached as an exhibit to the Company’s proxy statement for the 2005 annual meeting of shareholders. The current members of the Audit Committee are Gerald J. Laber (Chairperson), Carl A. Bellini and Dennis H. Field. Each member of the Audit Committee is an independent director as defined in the current Nasdaq rules. Mr. Laber has the professional experience deemed necessary to qualify as an audit committee financial expert under rules of the Securities and Exchange Commission. The Audit Committee had five meetings plus one action by unanimous written consent during 2005.

Nomination Process

     The Board of Directors of the Company does not have a nominating committee. The full Board of Directors performs the functions of a nominating committee. The Board of Directors believes that it does not need a separate nominating committee because the full Board is relatively small, has the time to perform the functions of selecting Board nominees and in the past has acted unanimously in regard to nominees.

     In considering an incumbent director whose term of office is to expire, the Board of Directors reviews the director’s overall service during the person’s term, the number of meetings attended, level of participation and quality of performance. In the case of new directors, the directors on the Board of Directors are asked for

suggestions as to potential candidates, discuss any candidates suggested by a shareholder of the Company and apply the criteria stated below. The Company may engage a professional search firm to locate nominees for the position of director of the Company. However, to date the Board of Directors has not engaged professional search firms for this purpose. A selection of a nominee by the Board of Directors requires a majority vote of the Company’s directors. The Board of Directors consists of seven members of which three directors are independent as defined in current Nasdaq rules.

     The board seeks candidates for nomination to the position of director who have excellent decision-making ability, business experience, particularly those relevant to consumer products, personal integrity and a high reputation and who meet such other criteria as may be set forth in a writing adopted by a majority vote of the Board of Directors.

     Pursuant to a policy adopted by the Board of Directors, the directors will take into consideration a director nominee submitted to the Company by a shareholder; provided that the shareholder submits the director nominee and reasonable supporting material concerning the nominee by the due date for a shareholder proposal to be included in the Company’s proxy statement for the applicable annual meeting as set forth in rules of the Securities and Exchange Commission then in effect. See “Shareholder Proposals” below.

Director Attendance at Company Annual Meetings

     The Company does not have a policy regarding attendance by members of the Board of Directors at the Company’s annual meeting of shareholders. The Company has always encouraged its directors to attend its annual meeting. In 2005, all directors attended the Company’s annual meeting of shareholders.

Stockholder Communications With the Board

     Historically, the Company has not had a formal process for stockholder communications with the Board of Directors. The Company has made an effort to insure that views expressed by a shareholder are presented to the Board of Directors.

Code of Business Conduct and Ethics

     The Company has a Code of Business Conduct and Ethics that reflects long-standing positions of the Company and contains additional provisions. The Code applies to all employees, including executive officers, and to directors. The Code concerns, among other things, compliance with applicable law, the avoidance of conflicts of interest, no trading by such a person if the person is aware of information that may be considered material, a prohibition on taking corporate opportunities, competing fairly and honestly, diversity as an asset, the Company’s efforts to provide a safe and healthful work environment, recordkeeping, confidentiality, proper use of Company assets and payments to government personnel. The Code sets forth steps which may be followed if there is a situation where it is difficult to know right from wrong. A copy of the Code of Business Conduct and Ethics may be obtained upon request to: Secretary, Scott’s Liquid Gold—Inc., 4880 Havana Street, Denver, Colorado 80239.

Compensation Committee Interlocks and Insider Participation

     Mr. Dennis Field serves on both the Compensation Committee and the Audit Committee. From 1978 to 1982, Mr. Field was President and Chief Operating Officer of Aquafilter Corporation, a wholly-owned subsidiary of the Company which manufactured cigarette filters. After leaving Aquafilter Corporation, Mr. Field had virtually no

contact with the Company from the date of his resignation to 1991 when he was asked to join the Company’s Board. Prior to 1991, he was Executive Vice President/General Manager, U.S. Division, of Faberge. Mr. Field has a distinguished career with significant consumer product companies.

     During 2005, none of the Company’s executive officers served on the board or compensation committee of another entity which had one of its executive officers serve as a director of the Company or a member of the Company’s Compensation Committee.

Executive Compensation

     Summary Compensation Table

     The following Summary Compensation Table shows the annual and other compensation of the chief executive officer and all other executive officers of the Company at December 31, 2005, for services in all capacities provided to the Company and its subsidiaries for the past three years.

SUMMARY COMPENSATION TABLE

		Annual Compensation																Long Term Compensation
Name and														Other Annual				Securities				All Other
Principal						Salary				Bonus				Compensation				Underlying Options				Compensation
Position		Year				$				$(1)				$				(#)				($)(2)
Mark E. Goldstein			2005			$	400,000				—			$	46,360				148,400			$	2,551
Chairman of the Board, President and			2004			$	400,000				—			$	36,032				—			$	2,692
Chief Executive Officer			2003			$	390,300				—			$	33,711				70,500			$	4,184
Jeffrey R. Hinkle			2005			$	225,000				—			$	12,605				148,400			$	2,551
Vice President — Marketing and			2004			$	225,000				—			$	12,069				—			$	2,692
Sales			2003			$	220,100				—			$	10,663				79,000			$	4,184
Jeffry B. Johnson			2005			$	190,000				—			$	12,362				148,400			$	2,337
Treasurer and Chief Financial			2004			$	190,000				—			$	17,311				—			$	2,525
Officer			2003			$	190,000				—			$	10,933				50,000			$	4,043
Dennis P. Passantino			2005			$	183,750				—			$	16,687				103,400			$	2,303
Vice President — Operations			2004			$	183,750				—			$	15,720				—			$	2,490
and Corporate Secretary			2003			$	183,750				—			$	13,606				85,000			$	4,089

The dollar amount of Other Annual Compensation changes from year to year because of fluctuations in the costs of benefits and their timing. Other Annual Compensation in the table above for 2003 through 2005 is comprised of the following:

		Mark E. Goldstein												Jeffrey R. Hinkle
		2003				2004				2005				2003				2004				2005
Automobile purchase (1)		$	—			$	—			$	—			$	—			$	—			$	—
Income taxes on automobile purchase (1)			—				—				—				—								—
Other automobile expenses			1,886				2,669				4,853				402				1,881				1,068
Memberships			14,015				17,946				25,247				—				—				—
Life insurance			2,412				2,412				2,412				1,344				1,478				1,478
Income taxes on life insurance			1,839				1,839				1,839				944				1,035				1,035
Medical plan (2)			5,362				3,851				4,694				2,812				2,688				4,037
Disability plan (3)			4,672				4,672				4,672				5,161				4,987				4,987
Other			3,525				2,643				2,643				—				—				—
Total other compensation		$	33,711			$	36,032			$	46,360			$	10,663			$	12,069			$	12,605

		Jeffry B. Johnson												Dennis P. Passantino
		2003				2004				2005				2003				2004				2005
Automobile purchase (1)		$	—			$	—			$	—			$	6,158			$	7,349			$	7,349
Income taxes on automobile purchase (1)			—				—				—				4,319				5,155				5,155
Other automobile expenses			907				1,428				2,061				1,170				576				656
Memberships			—				—				—				—				—				—
Life insurance			2,427				3,241				3,348				646				1,016				1,016
Income taxes on life insurance			1,657				2,272				2,349				621				713				713
Medical plan (2)			5,140				9,441				3,612				692				911				1,798
Disability plan (3)			802				929				992				—				—				—
Other			—				—				—				—				—				—
Total other compensation		$	10,933			$	17,311			$	12,362			$	13,606			$	15,720			$	16,687

     Option Grants in Last Fiscal Year

     The following table concerns the grant of options during the year ended December 31, 2005 to executive officers of the Company. All options granted in 2005 have an exercise price equal to at least the fair market value as of the date of grant.

																Potential Realizable Value
																at Assumed Annual Rates
																of Stock Price Appreciation
Individual Grants																for Option Term
						% of Total
		Number of Securities				Options
		Underlying Options				Granted to				Exercise or
		Granted				Employees in				Base Price
Name		(#)(2)(3)				Fiscal Year				($/Share)				Expiration Date		5%($)(1)				10%($)(1)
Mark E. Goldstein			80,000				8.3	%			59			May 3, 2010		$	7,935			$	22,374
Mark E. Goldstein			50,000				5.2	%			.66			August 22, 2010		$	5,288			$	15,315
Mark E. Goldstein			18,400				1.9	%			1.06			December 13, 2010		$	3,114			$	9,018
Jeffrey R. Hinkle			80,000				8.3	%			.54			May 3, 2010		$	11,935			$	26,374
Jeffrey R. Hinkle			50,000				5.2	%			.60			August 22, 2010		$	8,228			$	18,315
Jeffrey R. Hinkle			18,400				1.9	%			.96			December 13, 2010		$	4,880			$	10,784
Jeffry B. Johnson			80,000				8.3	%			.54			May 3, 2010		$	11,935			$	26,374
Jeffry B. Johnson			50,000				5.2	%			.60			August 22, 2010		$	8,288			$	18,315
Jeffry B. Johnson			18,400				1.9	%			.96			December 13, 2010		$	4,880			$	10,784
Dennis P. Passantino			80,000				8.3	%			.54			May 3, 2010		$	11,935			$	26,374
Dennis P. Passantino			5,000				0.5	%			.60			August 22, 2010		$	829			$	1,832
Dennis P. Passantino			18,400				1.9	%			.96			December 13, 2010		$	4,880			$	10,784

     Outstanding Options

     No options were exercised by any of the Company’s executive officers during 2005. The following table summarizes information with respect to the value of each person’s unexercised stock options at December 31, 2005.

Fiscal Year End Option Values

		Number of Securities								In-the-Money
		Underlying Unexercised								Value of Unexercisable
		Options at Year End								Options at Year End (1)
Name		Exercisable				Unexercisable				Exercisable				Unexercisable
Mark E. Goldstein			218,900				0			$	63,879				0
Jeffrey R. Hinkle			227,400				0			$	78,460				0
Jeffry B. Johnson			198,400				0			$	73,320				0
Dennis P. Passantino			198,400				0			$	81,220				0

COMPENSATION COMMITTEE REPORT

     Background

     The Compensation Committee of the Board of Directors, in February, 2005 at the time of establishing the compensation payable in 2005 to the Company’s executive officers, was comprised of three outside directors (Mr. Bellini, Mr. Field, and Mr. Laber) and the Company’s President (who serves as a non-voting member of the Committee). The responsibilities of the Compensation Committee include the origination of all executive compensation proposals.

     In making decisions regarding executive compensation, the Compensation Committee considers a number of factors. The Compensation Committee has also determined that an outside consultant on compensation matters should be used once every three years to provide information about the compensation paid to the Company’s executive officers compared to compensation paid by other companies.

     Organization Philosophy

     The Committee believes that the Company’s organization and the specific responsibilities of its executive officers are an essential part of analyzing compensation levels. The first important point concerning the management of the Company is that each executive subscribes to a team concept of executive management, and operates in accordance with this concept. Although each of the executive officers has specific areas of responsibility and each is able to and often does make independent decisions, the executive officers operate as a collaborative team, and very few, if any, significant decisions are made without input from the group as a whole.

     Second, each executive officer is responsible for a number of distinct areas and tasks. Each performs many tasks traditionally associated with “middle management” in other companies in addition to their respective duties of top level or executive management. As a result, the Company has very little “middle management” and operates as a fairly lean organization.

     Mark E. Goldstein became President and Chief Executive Officer of the Company in 1990 and Chairman of the Board in February, 2000. Mark E. Goldstein has the responsibilities associated with these positions at a public company. He is also actively involved in the sales and marketing efforts of the Company and its development of new products. For example, Mark Goldstein is the primary contact with the Company’s largest account, Wal-Mart Stores, Inc.; and he, together with Jeffrey R. Hinkle, directs the Company’s advertising and promotional efforts. Mr. Goldstein also directs the Company’s research and development and quality control activities. Each other executive officer reports to Mr. Goldstein as do certain key employees. He ultimately is responsible for the day-to-day operations of the Company, although he relies on the Company’s other executive officers for advice and counsel.

     Jeffrey R. Hinkle has been employed by the Company for 24 years. He joined the Company as a regional sales manager in 1981, held various sales positions at the Company’s subsidiaries, including Vice President-Marketing of subsidiaries, and became Vice President-Marketing of the Company in February, 2000. His current title is Vice President – Marketing and Sales. Mr. Hinkle manages the Company’s sales force, is responsible for marketing and works together with Mr. Goldstein in regard to the Company’s advertising and promotional efforts. Together with Mr. Goldstein, Mr. Hinkle is a primary contact with the Company’s largest accounts. Mr. Hinkle also is the primary contact with brokers utilized by the Company.

     Jeffry B. Johnson was elected as the Company’s Treasurer and Chief Financial Officer in November, 2000. Mr. Johnson has served the Company for 29 years. He joined the Company as internal auditor in 1976, was promoted to Controller in 1981, and to Chief Accounting Officer on October 1, 2000. Mr. Johnson performs all of the functions of Treasurer and Chief Financial Officer.. Mr. Johnson is in charge of the financial department, supervises with Mr. Goldstein information services, data processing and computer operations of the Company, oversees personnel benefits and is one of the officers involved in strategic planning. Mr. Johnson also negotiates and maintains the relationships of the Company with its lending bank and other creditors.

     Dennis P. Passantino was elected as an executive officer in November, 2002. He is the Vice President-Operations and Corporate Secretary. Mr. Passantino has served the Company for 24 years. He joined the Company as Materials Manager in 1981, was promoted to Operations Manager in 1991. Mr. Passantino has a direct responsibility for operations of the Company’s plant and facilities and oversees research and development, chemical quality control, regulatory and safety matters, purchasing from vendors, materials and office services.

     Factors and Policies

     In determining executive compensation in 2005, the Committee considered the management organization as described above and the following factors, among others:

	(a)		Services performed and time devoted to the Company by the executive;
	(b)		Amounts paid to executives in comparable companies;
	(c)		The size and complexities of the business;
	(d)		Successes achieved by the executive;
	(e)		The executive’s abilities;
	(f)		The executive tenure;
	(g)		Corporate financial results;
	(h)		Prevailing economic conditions;
	(i)		Compensation paid to other employees of the corporation; and
	(j)		The amount previously paid to the executive.

     The Company and the Compensation Committee have viewed the base salary as an important part of the compensation for the Company’s executive officers as well as other employees. The Company’s 2005 executive bonus plan provided for a bonus pool based on 10% of pre-tax profits (excluding items that are infrequent, unusual or extraordinary) for the year in excess of $1 million. Any bonus amount payable under the plan would have been divided among the executive officers. The Company had substantially the same plan in prior years and has implemented substantially the same plan for the year 2006. The compensation of executive officers also includes stock options. The Compensation Committee intends to have the stock options align the executive’s interest with those of the Company’s shareholders and provide a reward to executives if there is growth in shareholder value.

     The Company provides certain other benefits and perquisites to the executive officers. The Committee believes that the types of benefits offered to Company executives and the value of these benefits are similar to benefit packages provided by other companies. A number of the benefits are provided by the Company not only to the executive officers but also to other Company employees. The Company believes that these benefits are appropriate for their positions, to compensate them consistent with market levels and to facilitate performance of their jobs in a more efficient and effective manner.

     Application of Factors

     Utilizing these factors and policies, the Compensation Committee in February, 2005 determined that: Mr. Goldstein’s base salary would remain the same in 2005, as in 2004, at $400,000; Mr. Hinkle’s base salary would remain the same in 2005, as in 2004, at $225,000; that Mr. Johnson’s base salary would remain the same in 2005, as in 2004, at $190,000; that Mr. Passantino’s base salary would remain the same in 2005, as in 2004, at $183,750; that the 2005 key executive incentive bonus plan for executive officers be adopted; and that the components of other compensation provided to the Company’s executive officers will also remain the same in 2005 as in 2004. The Compensation Committee presented these determinations as recommendations to the Board of Directors of the Company, and the Board adopted these recommendations.

     In considering the factors and policies, the Compensation Committee reviewed various matters, including:

•

The Hay Group was most recently engaged in 2004 and issued a compensation report in February, 2004. This report compared each element of the Company’s base salary, total cash and total direct compensation for executive officers to the Hay Group’s all-company executive compensation survey and to a peer group of fourteen companies in consumer products and specialty chemical industries. The peer group had median revenues of $30.3 million as of the most recent fiscal year end available to the Hay Group. The report concluded that:

The aggregate total direct compensation levels (consisting of base salary, annual incentive and present value of long-term incentives) of the Company’s four executives fall between the 25th and 50th percentile levels of the peer group and approximate the 25th percentile level of the general industry market, in the aggregate.

For the chief executive officer of the Company, actual total direct compensation levels are below the median of the markets by approximately 20% to 25%.

Aggregate total cash compensation levels (consisting of base salary and annual incentive) of the Company’s four executive officers are within +/-5% of the median of each of the peer group and general industry group.

In the aggregate, base salary levels of the Company’s four executive officers approximate the 75th percentile level of the peer group market and exceed the 75th percentile level of the general industry market.

			As noted in the report, no annual incentives were paid in 2003, and therefore the actual total cash compensation equals base salary in the case of the Company.
	•		The Company experienced a loss in 2004.
	•		In 2004 the executive officers reinvigorated Scott’s Liquid Gold for wood, with a resulting increase in sales of that product and increased distribution of that product in the United States.

	•		The Company introduced a line extension for Scott’s Liquid Gold for wood.
	•		The Company increased sales of Touch of Scent in 2004.
	•		The Company worked on repositioning Alpha Hydrox, which should impact sales in 2005.
	•		The Company expanded distribution of Montagne Jeunesse products.
	•		The Company has actively been working on other possible new products.
	•		The Company has generally paid well its employees as part of its philosophy that good employees who are paid well and stay with the Company can contribute significantly to the successes of the Company’s business. Many of the Company’s personnel are long-term employees.
	•		Mr. Goldstein’s base salary was raised in 2003; Mr. Hinkle’s base salary was raised in 2003; Mr. Johnson’s base salary was last changed when he became an executive officer in October, 2000; and Mr. Passantino’s base salary has remained unchanged since prior to the time of his becoming an executive officer in November, 2002.
	•		The base salaries, as determined by the Committee, and any bonus in 2005 were expected to be tax deductible, without being subject to a limitation on the deductibility or certain compensation in excess of $1 million under the Internal Revenue Code.
	•		The existing form of bonus plan emphasizes performance and successes achieved by the executives, and this form of bonus plan as well as other components of compensation have been in effect for a number of years.

     During 2005, the Compensation Committee granted stock options to the Company’s President and Chief Executive Officer as well as the other executive officers for the reasons indicated above. The Compensation Committee also took into account options which were expiring during 2005, options granted to other employees, the accounting treatment which became effective for options on January 1, 2006 and their subjective judgment in regard to the executive’s performance.

     Since 1992, the Compensation Committee has engaged a consultant on matters of comparable compensation every three years. The Hay Group was most recently engaged in 2004 and issued a report in February, 2004 as indicated above.

     In conclusion, the Compensation Committee believes that the levels of compensation for the Company’s executive officers have been fair and appropriate.

COMPENSATION COMMITTEE
Carl A. Bellini
Dennis H. Field
Gerald J. Laber
Mark E. Goldstein
February 22, 2006

Stock Performance Graph

There follows a graph, constructed for the Company, comparing the cumulative total shareholder return of Scott’s Liquid Gold-Inc. common stock to the Hemscott Market Index (see below), and to a selected peer group.

Fiscal year ended December 31

Assumes $100 invested on January 1, 2001
in the Company, the Peer Group,
The Hemscott Market Index
and assumes the reinvestment of any dividends

Note: The foregoing graph was prepared for the Company by Hemscott, Inc. (formerly known as CoreData). The peer group selected by the Company consists of companies which use the standard industrial classification of specialty cleaning and sanitation and which are publicly held, and other publicly held companies which are partially or entirely engaged in the cosmetics business. The Company believes that, within its industry classes, the assembly of a peer group is difficult because the Company competes with other companies that are significantly larger than Scott’s Liquid Gold-Inc., including two major companies which are not publicly traded.

     The following companies comprise the peer group: Avon Products, Inc., CCA Industries, Inc., Chattem, Inc., Clorox Co., Del Laboratories, Inc., and Procter & Gamble Co. The Hemscott Market Index, a published index, is a broad based common stock index, taking into account the market value of all of the companies on the New York Stock Exchange, American Stock Exchange and NASDAQ (including the National Market, Small Cap and OTC Bulletin Board) issues followed by Hemscott, Inc. totaling over 10,000 issues. The index is fully adjusted for stock splits and stock dividends.

Compensation of Directors

     Four directors are full-time executive officers of the Company and receive no additional compensation for service as a director. Carl A. Bellini, Dennis H. Field, and Gerald J. Laber are non-employee directors. The Company pays $2,500 per month to each non-employee director for his services as director.

     On January 15, 1993, the Company’s Board of Directors adopted the Company’s 1993 Stock Option Plan for Outside Directors, which was approved by the Company’s shareholders on May 5, 1993. The 1993 Plan provides for the granting of options to directors who are not employees of the Company. The purpose of the 1993 Plan is to further the growth and development of the Company by providing an incentive to outside directors of the Company, by increasing their involvement in the business and affairs of the Company, by helping the Company to attract and retain well qualified directors and/or by rewarding directors for their past dedication to the Company. The 1993 Plan became effective on January 15, 1993 and expired January 15, 2003.

     A maximum of 400,000 shares of the Company’s common stock were available for issuance upon the exercise of options granted under the 1993 Plan. The number of shares subject to outstanding options, and the exercise price per share of such options are subject to adjustment on account of stock dividends, stock splits, mergers, consolidations, recapitalizations, combinations or exchanges of stock, or other similar circumstances.

     The 1993 Plan is administered by the Board of Directors or a committee appointed by and serving at the pleasure of the Board of Directors, consisting of no fewer than two directors. The 1993 Plan is currently administered by the Board of Directors. At March 14, 2006, options to purchase 100,000 shares of the Company’s common stock were outstanding under the Plan. Except for the exercise of options for 100,000 shares by a director, who resigned from the Board during 1999, no options had been exercised under the 1993 Plan on or prior to December 31, 2005.

     The non-employee directors are also eligible to receive grants of options under the 1998 and 2005 Stock Option Plans. Other eligible persons under the 1998 and 2005 Plans are all full-time employees of the Company, and the Plans have been used primarily to provide options to full-time employees. Options granted to non-employee directors under the 1998 and 2005 Plans consist of options for a total of 370,000 shares, of which 75,000 options have expired without being exercised.

     As of March 14, 2006, no current non-employee director has exercised any options granted to the director. The following table describes the grant of options during the year ended December 31, 2005 to the three non-employee directors of the Company. All options granted in 2005 and previously have an exercise price equal to the fair market value as of the date of grant, are 100% vested and expire after five years.

										Potential Realizable Value
										at Assumed Annual Rates
										of Stock Price Appreciation
Individual Grants										for Option Term
		Number of
		Securities		% of Total Options
		Underlying Options		Granted to
		Granted		Employees in		Exercise or Base
Name		( #)(2)(3)		Fiscal Year		Price ($/Share)		Expiration Date		5%($)(1)		10%($)(1)
Carl A. Bellini		30,000		3.1%		0.54		May 3, 2010		$4,476		$  9,890
Carl A. Bellini		25,000		2.6%		0.60		August 22, 2010		$4,144		$  9,158
Carl A. Bellini		30,000		3.1%		0.60		August 22,2010		$4,973		$10,989
Dennis H. Field		25,000		2.6%		0.60		May 3, 2010		$4,144		$  9,158
Gerald J. Laber		30,000		3.1%		0.60		August 22, 2010		$4,973		$10,989
Gerald J. Laber		30,000		3.1%		0.96		December 13, 2010		$7,957		$17,583

     The following table summarizes information with respect to the value of each non-employee director’s unexercised stock options at December 31, 2005:

		Year End Option Values
		Number of Securities Underlying								In-the-Money Value of Unexercised
		Unexercised Options at Year End								Options at Year End (1)
Name		Exercisable				Unexercisable				Exercisable				Unexercisable
Carl A. Bellini			135,000				0			$	51,900				0
Dennis H. Field			170,000				0			$	63,300				0
Gerald J. Laber			90,000				0			$	16,800				0

CERTAIN TRANSACTIONS

     The Company has indemnification agreements with each of its directors and executive officers. These agreements provide for indemnification and advancement of expenses to the full extent permitted by law in connection with any proceeding in which the person is made a party because the person is a director or officer of the Company. They also state certain procedures, presumptions and terms relevant to indemnification and advancement of expenses.

     The principal and controlling owner of Montagne Jeunesse, Gregory Butcher owned beneficially, to the knowledge of the Company, at March 14, 2006, approximately 7.1% of the Company’s outstanding common stock. The Company has a distributorship agreement with Montagne Jeunesse, which was first established prior to Mr. Butcher’s ownership of any shares in the Company and under which the Company purchases from Montagne Jeunesse, and sells in the United States, sachets of Montagne Jeunesse containing skin care and other beauty care products. During 2005, the Company’s purchases of these sachets from Montagne Jeunesse were in the amount of $4,959,900. The Company’s sales of Montagne Jeunesse products accounted in 2005 for a significant portion of the Company’s total net revenues.

SECTION 16 REPORTS

     Section 16(a) of the Securities Exchange Act of 1934 requires directors, executive officers and beneficial owners of more than 10% of the outstanding shares of the Company to file with the Securities and Exchange Commission reports regarding changes in their beneficial ownership of shares in the Company. To the Company’s knowledge, there was full compliance with all Section 16(a) filing requirements applicable to those persons for reports filed in 2005, except that each of the directors and executive officers did not timely file two Form 4s, one for each of two grants of stock options during 2005.

COMPANY ACCOUNTANTS

General

     Ehrhardt, Keefe, Steiner & Hottman PC has been selected by the Audit Committee of the Board of Directors as the Company’s independent auditors for the fiscal year ended December 31, 2006. Ehrhardt, Keefe, Steiner and Hottman PC has been the Company’s independent auditors since June, 2003. A representative of Ehrhardt, Keefe, Steiner & Hottman PC is expected to be present at the Annual Meeting of Shareholders and to have the opportunity to make a statement if the representative so desires. Such representative also is expected to be available to respond to appropriate questions at that time.

REPORT OF AUDIT COMMITTEE

March 9, 2006

To the Board of Directors of Scott’s Liquid Gold-Inc.:

     We have reviewed and discussed with management the Company’s audited financial statements. We have discussed with Ehrhardt, Keefe, Steiner & Hottman PC, its independent auditors, the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended, by the Auditing Standards Board of the American Institute of Certified Public Accountants. We have received and reviewed the written disclosures and the letter from the independent auditors required by Independence Standard No. 1, Independence Discussions with Audit Committees, as amended, by the Independence Standards Board, and have discussed with the auditors the auditors’ independence.

     Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the audited financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 and filed with the Securities and Exchange Commission.

     The Audit Committee is composed of the three directors named below, all of whom are independent directors as defined in Rule 4200(a)(15) of the Nasdaq Stock Market listing standards.

     The Board has adopted a written charter for the Audit Committee.

     Submitted by the members of the Audit Committee of the Board of Directors.

Gerald J. Laber, Chairman
Carl A. Bellini
Dennis H. Field

Disclosure of Auditor Fees

     The following is a description of the fees billed to the Company by its independent auditor (Ehrhardt, Keefe, Steiner & Hottman PC) for each of the years ended December 31, 2005 and 2004.

Audit and Non-Audit Fees		2005				2004
Audit fees		$	47,607			$	47,910
Audit-related fees			34,620				23,872
Tax fees			1,800				30,650
All other fees			15,470				14,770
Total		$	99,497			$	117,202

     Audit fees are for the audit of the Company’s annual financial statements and the review of the Company’s Form 10-K. Audit-related fees include review of the Company’s interim financial statements and Forms 10-Q, required review of certain filings with the SEC and issuance of consents and review of correspondence between the Company and the SEC. Tax fees primarily include tax compliance, tax advice, including the review of, and assistance in the preparation of, federal and state tax returns. All other fees in 2005 relate to audit of the three employee benefit plans of the Company.

Policy on Pre-Approval of Audit and Non-Audit Services

     The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent public accountants. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services. The Audit Committee has delegated limited pre-approval authority to its chairperson. The chairperson is required to report any decisions to pre-approve such services to the full Audit Committee at its next meeting.

SHAREHOLDER PROPOSALS

     Shareholder proposals for inclusion in the Company’s proxy materials relating to the next annual meeting of shareholders must be received by the Company on or before November 29, 2006. Also, persons named in the proxy solicited by the Board of Directors of the Company for its year 2007 annual meeting of shareholders may exercise discretionary authority on any proposal presented by a shareholder of the Company at that meeting if the Company has not received notice of the proposal by February 12, 2007.

2005 ANNUAL REPORT ON FORM 10-K

     Shareholders who wish to obtain, without charge, a copy of the Company’s Form 10-K report for the year ended December 31, 2005 in the form filed with the Securities and Exchange Commission should address a written request to Dennis P. Passantino, Corporate Secretary, Scott’s Liquid Gold-Inc., 4880 Havana Street, Denver, Colorado 80239. The Company’s annual report to shareholders consists of such Form 10-K and accompanies this proxy statement.

SOLICITATION OF PROXIES

     The Company will pay the cost of soliciting proxies in the accompanying form. In addition to solicitation by mail, proxies may be solicited by officers and other regular employees of the Company by telephone, telegraph or by personal interview for which employees will not receive additional compensation. Arrangements also may be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to beneficial owners of the shares held of record by such persons, and the Company may reimburse such persons for reasonable out-of pocket expenses incurred by them in so doing.

OTHER BUSINESS

     As of the date of this Proxy Statement, Management was not aware that any business not described above would be presented for consideration at the meeting. If any other business properly comes before the meeting, it is intended that the shares represented by proxies will be voted in respect thereto in accordance with the judgment of the persons voting them.

     The above Notice and Proxy Statement are sent by order of the Board of Directors.

		Dennis P. Passantino
		Corporate Secretary

Denver, Colorado
March 29, 2006

SCOTT’S LIQUID GOLD-INC.

ANNUAL MEETING OF STOCKHOLDERS

Wednesday, May 3, 2006
9:00 A.M. Mountain Time

4880 HAVANA STREET
DENVER, COLORADO 80239

		Scott’s Liquid Gold-Inc. 4880 Havana Street Denver, Colorado 80239		proxy

This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 3, 2006, at 9:00 A.M. Mountain Time.

The shares of stock you hold in your account will be voted as you specify on the reverse side.

If no choice is specified, the proxy will be voted “FOR” Item 1.

By signing the proxy, you revoke all prior proxies and appoint Mark E. Goldstein, Jeffrey R. Hinkle, Jeffry B. Johnson and Dennis P. Passantino, and each of them acting in the absence of the others, with full power of substitution, as your proxies to vote all your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments.

See reverse for voting instructions.

ò Please detach here ò

The Board of Directors Recommends a Vote FOR Item 1.

1.

Election of directors:

01

Mark E. Goldstein

05

Carl A. Bellini

Vote FOR

Vote WITHHELD

02

Jeffrey R. Hinkle

06

Dennis H. Field

o

all nominees

o

from all nominees

03

Jeffry B. Johnson

07

Gerald J. Laber

(except as marked)

04

Dennis P. Passantino

(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.)

2.

In their discretion, the Proxies are authorized to vote upon such other business as properly may come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSAL ONE.

Address Change? Mark Box		o		Indicate changes below:		Date

Signature(s) in Box

Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.