How Will Recreational Marijuana Sales be Taxed?
In November 2012, Colorado voters approved a measure that legalized the purchase and possession of marijuana for recreational use. When Amendment 64 was passed, retail sales for marijuana were set to begin on January 1, 2014. Since this approval, the Colorado Legislature has been forming the regulations that would accompany the legal purchase and possession of small amounts of marijuana. One of the regulations being voted on by the Colorado Legislature is how marijuana will be taxed.
Taxation of this controversial substance continues to benefit the state of Colorado. The state and county governments have already generated millions of dollars through the taxation of medical marijuana. In 2012, the State of Colorado generated more than $199,000,000 in taxation of medical marijuana retail sales. El Paso County generated almost $35,000,000 in tax revenue. The addition of recreational marijuana sales will substantially increase the amount of money this controversial substance generates for our state.
Setting a reasonable tax rate for the sale of marijuana has been a daunting task for the Colorado Legislature. The goal is to set taxes high enough to finance the administration of regulating the new marijuana laws but avoid having users go to the black market to purchase marijuana.
The legislature passed House Bill 1318, which purposed a 15 percent excise tax and a 10 percent sales tax on marijuana. Also, state and local taxes could bring the total tax rate to around 30 percent in some areas. Amendment 64 states that the first $40 million of the 15 percent excise tax will be allocated to Colorado schools. The other tax revenue raised by sales will be apportioned to city and county government.
However, the obstacles for legalizing marijuana are not over. Under the Colorado Taxpayer’s Bill of Rights (TABOR), voters must approve the above tax rates before they are official. If the proposed tax rates do not pass voter approval, the date for retail sales of marijuana may be delayed.
The legalization of marijuana in Colorado does not alleviate Coloradoans of following the laws established by our legislature for the legal use of this drug. Mr. Bussey has defended drug offenses for more than 15 years. If you are faced with criminal charges, an experienced attorney can help you defend yourself in court and protect your legal rights.
At the Bussey Law Firm, P.C., dedicated Colorado Springs drug crime defense lawyer Tim Bussey strives provides the outstanding representation each client deserves, no matter the charges. For a free and confidential consultation, call us today at (719) 475-2555.