How High Is Too High For Colorado Pot Taxes?
Amendment 64 paved the way for the legal use of recreational marijuana in Colorado. It also tasked state lawmakers with enacting an excise tax on marijuana sales to fund public school construction.
Any tax increase in Colorado needs voter approval which is why Proposition AA is on the 2013 election ballot.
There are actually two tax questions within proposition AA – including a 15 percent excise tax and a 10 percent sales tax.
How much money is the excise tax expected to raise and what will it be used for?
“The excise tax is set at 15 percent and they’re (supporters) anticipating that if Proposition AA is approved, approximately $70 million a year in additional revenue will be coming into the state and $40 million of that is going to be going into a fund for public school capitol construction. And anything after that will go towards regulation of marijuana.”
State lawmakers didn’t think the excise tax would be enough for regulation, so Proposition AA also includes a sales tax. What will this money cover?
“We’re talking about a whole range of things – everything from labeling marijuana, to public safety issues regarding sales of it, regulation of retail shops and enforcement and testing as well. And this has been a problem with the regulation of medical marijuana, an audit of that was found to be deficient last year and people were really outraged that it had gotten so out of line. So I think regulators this time are looking to really make sure that recreational marijuana is highly regulated throughout the whole state.”
Local communities can also tax recreational marijuana. Has the tax issue caused a divide between the two groups that pushed for the passage of Amendment 64 last year?
“One of the groups, NORML (National Organization for the Reform of Marijuana Laws), which has been active for years and has been a proponent for the legalization of recreational marijuana is against Proposition AA. They point to the fact that when the legislature dealt with this measure it established an excise tax but it didn’t require an additional sales tax. And they think also that there’s too much money going into the state coffers and that it might even defeat its purpose and put people back into looking for marijuana from the black market. On the other hand you have the group Sensible Colorado and a lot of the proponents as well who back this measure who say that look, we got it passed, now we need to be careful that its regulated fairly and that we don’t many mistakes. A lot of other states including Washington, which also passed recreational marijuana, are watching us so we need to be responsible and do the right thing with our tax measures.”
Jody Hope Strogoff is the Publisher of the Colorado Statesman.