After retail sales of marijuana began Jan. 1 in Colorado, the town of Breckenridge needed to buy a cash-counting machine to keep tabs on taxes turned in to the town.
Breckenridge collected $38,033 from its local 5 percent recreational marijuana excise tax for January 2014. In total, $760,660 in recreational marijuana sales was reported in the town for that month. The total January 2014 tax revenues collected from marijuana totalled $77,835.
Brian Waldes, Breckenridge financial services manager, said January will most likely be one of the top-performing months this year, due to the novelty of the start of sales.
“It’s very telling, since we’re thinking that was the busiest month,” he said. “I doubt we’ll see lines like that again.”
In November, voters approved the excise tax by 72 percent. The revenue goes into a newly formed marijuana fund. That fund was estimated to bring in about $800,000 per year, and includes money back from state and other taxes. The additional funds cover the costs of a police officer, enforcement, administration and education. The 5 percent excise tax on medical marijuana in the town brought in $7,435 in January.
“We’re getting big cash remittances,” Waldes said. “There’s no doubt it makes it more difficult, especially to audit. We’d love to see these shops get banking options.”
The security of the cash held at the establishments remains a concern for the town, though arrangements have been made with some businesses.
Frisco has only one retail store and one medical dispensary, so the town reported both sales tax numbers together in order to honor the privacy of the businesses, according to town revenue specialist Chad Most. For January 2014, the total collected for the local 5 percent recreational and the 5 percent medicinal excise taxes combined was $12,581.
Donna Braun, Silverthorne finance director, said the town is unable to release sales tax numbers, because there is only one marijuana store there.
“We are under the national spotlight; we want to get it right,” Breck’s Waldes said. “Based on one month, we’re looking pretty good and we’re pleased with that. We’re just making sure people are following the rules.”
Colorado brought in a little more than $2 million total in retail sales tax and licensing fees for the month. The total for all marijuana taxes, licenses and fees in Colorado in January was $3.5 million. A 10 percent state retail marijuana sales tax and a 15 percent excise tax were approved by voters last November.
Breckenridge received $11,410 of a total $210,269 distributed to local governments from the 10 percent retail marijuana state sales tax. Local governments receive 15 percent of that tax, with individual amounts based on the amount of retail marijuana sales taxes in the local jurisdiction. The process is similar to how cigarette tax is distributed to local governments.
“We were concerned there might be discrepancies with cash-only businesses,” Waldes said. “That’s been a big concern for us, with all of that cash there is a lot of room for confusion.”
Waldes said it was encouraging that the numbers reported to the state matched up with the town’s expectations, meaning that even with the large amount of cash, the local stores were honest with their taxes.
“That would have been a huge red flag if that had not been the case,” he said.
For Summit County as a whole, the 2.9 percent retail marijuana sales tax gathered $37,274, and the additional 10 percent sales tax brought in $108,307, which accounts for about 11 percent of the state numbers in those categories.
“There are lots of hoops, lots of paper, layers of retail and excise taxes,” Waldes said. “We wanted to get it right out of the gate.”
“It’s very telling, since we’re thinking that (January) was the busiest month. I doubt we’ll see lines like that again.”
Breckenridge finance manager