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A study released today by the Colorado Futures Center at Colorado State University has found that proposed state taxes on recreational marijuana, part of the implementation of Amendment 64, will generate about $130 million in revenue during the first year.
The Colorado General Assembly is currently considering legislation that would levy an excise tax of 15 percent of the wholesale value of marijuana; especial sales tax of 15 percent on the retail sale of marijuana; and extension of the state's existing 2.9 percent general sales tax to sales of marijuana and marijuana products.
The Colorado Futures Center study, titled "The Fiscal Impact of Amendment 64 on State Revenues," found, however, that proposed taxes are structured in such a way that they will not generate $40 million from the excise tax that was to be set aside for school construction under the amendment. In addition, the tax proposal will not produce enough revenue to make a meaningful dent in Colorado's long-term structural budget gap.
"Colorado voters are certainly breaking new ground with Amendment 64, and now state lawmakers are grappling with how to regulate and tax recreational marijuana in a responsible and sustainable manner," said Charles Brown, executive director of the Colorado Futures Center at CSU. "Though there are still quite a few unknowns, our analysis indicates that the proposed tax structure will only deliver about half of the $40 million for school construction envisioned under Amendment 64. Additionally, taxing recreational marijuana will not generate enough revenue to substantively play a role in addressing Colorado's systemic budget challenges."
The Colorado Futures Center at CSU provides vital research and analysis of public policies impacting Colorado's future and quality of life. The Center delivers independent, nonpartisan and academically grounded input on a broad range of issues related to the economic health of the state of Colorado.
The analysis of proposed Amendment 64 tax measures produced five key findings:
"While all of the assumptions made in the study were grounded in rigorous research and strong data, we recognize that the unprecedented nature of transitioning a largely underground market into a regulated industry leaves a lot open for debate and interpretation," said Phyllis Resnick, chief economist for the Colorado Futures Center at CSU and author of the Amendment 64 study. "To that end, we've created a companion online tool that allows anyone to make different assumptions and then immediately see the impact on state revenues. We hope this will be useful for state lawmakers and citizens as Colorado weighs how best to implement Amendment 64 and regulate recreational marijuana."
News Hawk- Truth Seeker 420 MAGAZINE ®
Source: boulderjournal.com
Author: Staff Report
Contact: Boulder iJournal | Contact
Website: Study: Marijuana taxes would net $130M in first year
The Colorado General Assembly is currently considering legislation that would levy an excise tax of 15 percent of the wholesale value of marijuana; especial sales tax of 15 percent on the retail sale of marijuana; and extension of the state's existing 2.9 percent general sales tax to sales of marijuana and marijuana products.
The Colorado Futures Center study, titled "The Fiscal Impact of Amendment 64 on State Revenues," found, however, that proposed taxes are structured in such a way that they will not generate $40 million from the excise tax that was to be set aside for school construction under the amendment. In addition, the tax proposal will not produce enough revenue to make a meaningful dent in Colorado's long-term structural budget gap.
"Colorado voters are certainly breaking new ground with Amendment 64, and now state lawmakers are grappling with how to regulate and tax recreational marijuana in a responsible and sustainable manner," said Charles Brown, executive director of the Colorado Futures Center at CSU. "Though there are still quite a few unknowns, our analysis indicates that the proposed tax structure will only deliver about half of the $40 million for school construction envisioned under Amendment 64. Additionally, taxing recreational marijuana will not generate enough revenue to substantively play a role in addressing Colorado's systemic budget challenges."
The Colorado Futures Center at CSU provides vital research and analysis of public policies impacting Colorado's future and quality of life. The Center delivers independent, nonpartisan and academically grounded input on a broad range of issues related to the economic health of the state of Colorado.
The analysis of proposed Amendment 64 tax measures produced five key findings:
- The adult recreational marijuana market in Colorado will be $605.7 million and taxation of that market will bring an additional $130.1 million in state tax revenue in fiscal year 2014-15.
- The 15 percent wholesale excise tax created by the amendment will not reach the goal of $40 million for school construction.
- The high water mark for marijuana tax revenue is likely to be in the first few post-legalization years, with revenue flattening or declining thereafter.
- Marijuana tax revenues may not cover the incremental state expenditures related to legalization.
- Marijuana tax revenues will not close Colorado's structural budget gap.
"While all of the assumptions made in the study were grounded in rigorous research and strong data, we recognize that the unprecedented nature of transitioning a largely underground market into a regulated industry leaves a lot open for debate and interpretation," said Phyllis Resnick, chief economist for the Colorado Futures Center at CSU and author of the Amendment 64 study. "To that end, we've created a companion online tool that allows anyone to make different assumptions and then immediately see the impact on state revenues. We hope this will be useful for state lawmakers and citizens as Colorado weighs how best to implement Amendment 64 and regulate recreational marijuana."
News Hawk- Truth Seeker 420 MAGAZINE ®
Source: boulderjournal.com
Author: Staff Report
Contact: Boulder iJournal | Contact
Website: Study: Marijuana taxes would net $130M in first year
