Colorado Recreational Marijuana Will Be Sales-Tax Free On Wednesday
Unless you have been living on the moon for the last few years, then you know that the recreational cannabis industry in Colorado is booming. It’s booming so much so that recreational marijuana sales tax revenue has exceeded projections. That has triggered a ‘tax holiday’ for recreational marijuana purchases/sales in Colorado for a day. Per The Cananbist:
Colorado’s Taxpayer’s Bill of Rights requires voter approval for new taxes. In 2013, a year after legalizing recreational pot, voters approved the 25 percent taxes. But the law requires that any new taxes be waived and refunded if overall state collections exceed projections given to voters when they approved the new taxes.
In this case, the pot taxes were projected to raise $70 million in 2014. They actually raised $58 million, but because overall tax collections that year exceeded projections, Colorado must ask voters for permission to keep the money. And to comply with the requirement that the taxes revert to zero, lawmakers settled on a short one-day tax waiver.
That day is Sept. 16, one day after the state’s books for the previous fiscal year are made final.
Marijuana won’t be completely tax-free that day. A regular 2.9 percent sales tax still applies, as do medical marijuana taxes and local pot taxes.
One has to assume that consumers are gearing up for this day, and plan on buying more than usual. I wonder if we will see lines as long as they were on January 1st, when recreational marijuana went on sale legally for the first time in America? I doubt it will be quite that busy, but stranger things have happened. I can’t wait until recreational marijuana sales begin in my home state of Oregon, and we can start generating tax revenue like Colorado.