In Colorado and Summit County, recreational marijuana taxes take a holiday
For one day this month, retail marijuana taxes will take a brief reprieve. And in the longterm, pot tax rates overall could go down.
Taxes on retail marijuana sold in Colorado will be suspended for one day, Sept. 16, due to regulations established in the Taxpayers Bill of Rights, also known as TABOR.
TABOR requirements mandate that taxes collected that exceed estimates must be refunded to taxpayers.
However, marijuana taxes for the fiscal year of 2014-15 were projected to reach $70 million, the final numbers were under that estimate, at about $58 million.
Instead, what necessitated this tax holiday was that overall state revenues and spending exceeded estimates.
During the one-day tax holiday, the state will eliminate a 10 percent tax on retail marijuana sales. Additionally, cultivators will not be required to assess a 15 percent excise tax on wholesale sales to dispensaries.
Cannabis consumers will still pay a 2.9 percent state general sales tax and applicable local jurisdiction taxes. Medical marijuana tax rates will be unaffected.
Some estimates claim the state will lose up to $100,000 in revenue due to the one-day tax reduction. Also, the state anticipates losing up to $3.6 million from suspending the 15 percent excise tax on wholesale purchases from cultivators.
Local dispensaires are gearing up for a busy day on Wednesday. Tripp Smith, assistant manager at Native Roots in Frisco, isn’t sure if the tax holiday will attract local residents, “We’re kind of expecting an influx of tourists,” he said.
This June, Governor Hickenlooper signed House Bill 1367 which, starting in July 2017, will permanently reduce the recreational marijuana tax rate from 10 percent to 8 percent.
HB 1367 also set ballot initiative BB which asks voters to decide in November if the state can retain the $58 million collected from marijuana taxation or if the money should be refunded.
If voters decide the state retains the funds, $40 million will be earmarked for public school construction, $12 million will fund marijuana education and youth programs, and the remaining $6 million would be put into the general fund.
If the vote favors refunding the money, about $19.7 million will be returned to cultivation facilities, $25 million will be divided among all state taxpayers and $13.3 million will be used to temporarily reduce marijuana taxes.
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