Understanding Colorado’s pot sale… The Colorado Tax Payer Bill of Rights unintentionally has created a new holiday for marijuana consumers in the state. On September 16, pot will be way cheaper.
Colorado’s Pot Sale: The Backstory
Here’s the backstory: In Colorado, voter approval is required for all new taxes and voters passed a 25% tax on all dispensary sales for the state. At the same time, however, Colorado state law makes it so that if tax collections in the state exceed published projections at the time of voter approval, then the state must waive taxes or else issue tax refunds. So voters approved 25% on weed sales (earmarked for education) but the state can’t accept the income if it all adds up to be more than they were told it would be.
The pickle – a headache for lawmakers we’ve also brought up here – actually comes from overall tax income for the state. 2014 state taxes exceeded projections. $58 million of 2014 tax income was raised by pot. Colorado voters approved $70 million. But, again, it’s the overall tax income that’s the issue. It was just too much.
The concession now in play is that Colorado will suspend recreational marijuana taxes on September 16 making (this year) for a statewide weed buying holiday (think Nordstrom’s half yearly for cannabusinesses). September 16 will cost the state an estimated $3 million and create a massively anticipated supply/demand scenario for dispensaries.
Colorado’s pot sales tax will apply as will any other local or other applicable taxes but this suspension alone is as big a discount as may ever be offered.