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A question that has emerged since Amendment 64 passed last year is: How will retail marijuana sales in Colorado be taxed?
One answer can be found in the form of Proposition AA, a state ballot measure that will go before voters on Nov. 5.
Proposition AA specifies tax amounts, how they will be collected and who gets the money. If the proposition is approved, it will place a 15 percent excise tax on all marijuana wholesales and another 10 percent sales tax on retail sales.
All new taxes in Colorado must be voter approved, which is why Proposition AA will be on the ballot. While most of the money collected will go to the state, the proposition calls for 15 percent of the 10 percent sales tax to go to local towns and counties where marijuana sales are allowed. Also, the first $40 million generated by the excise tax is to go toward school construction.
"If it doesn't pass then there wouldn't be the excise tax, and no money for school construction," said Pat Steadman, a Colorado state senator who was in Telluride this week as part of a statewide tour to promote the measure. "If there isn't funding from this sales tax, we would be looking at other state revenues. So paying for the costs of legal marijuana would come out of the [state's] general fund."
The Prop AA taxes would be on top of other state and local sales taxes, so the actual taxed percentage would vary depending on where they are applied.
Though Steadman said estimates show that the excise tax would only generate around $27.5 million in its first year, he thinks it is an important part of making recreational marijuana work. He said with a strong tax structure in place, recreational marijuana will stand up better to scrutiny – especially from the federal government, which still defines marijuana use as illegal.
In Colorado, Steadman said the marijuana taxes would be similar to those placed on tobacco products. Tobacco sales in Colorado have a 34 percent sales tax.
Though officials have said they don't expect retail marijuana to add much to the state's general fund, some local growers think the taxes are too high.
"I am all for taxation of this industry – just not at that level," said Adam Raleigh, owner of the Telluride Bud Company. "I would like it to be taxed at alcohol levels, not at tobacco levels. The sheer volume [of tax revenue] alone that is going to create is enough to not have to gouge the mom and pop stores."
With the proposition, the state expects retail marijuana to at least cover its administrative costs, according to a state fact sheet on AA.
Many of the proposition's projections about how much money will be generated are based on what has been seen with medical marijuana, which has been technically legal in Colorado since 2000.
Depending on how high or low marijuana sales end up being, the proposition allows the state to raise or lower the tax rate if it passes, but it cannot exceed 15 percent for excise tax portion.
"I actually think in the future as the market takes off, we'll look at lowering the rates," Steadman said. "Because there's quite a bit of revenue that's expected to be generated off of this. I think having money available to study the phenomenon is very important. Social scientists and public health researchers are really interested to see what happens."
The passage of Amendment 64 last November made it legal for adults 21 and older in Colorado to possess up to 1 ounce of marijuana.
In September, the Town of Telluride and San Miguel County decided to allow retail sales, while the Town of Norwood banned them and Mountain Village placed a moratorium on sales until its town council has time to review all of its options.
News Hawk- Truth Seeker 420 MAGAZINE ®
Source: telluridenews.com
Author: Collin McRann
Contact: Telluride Daily Planet > Our Newspaper > Contact Us
Website: Telluride Daily Planet > News
One answer can be found in the form of Proposition AA, a state ballot measure that will go before voters on Nov. 5.
Proposition AA specifies tax amounts, how they will be collected and who gets the money. If the proposition is approved, it will place a 15 percent excise tax on all marijuana wholesales and another 10 percent sales tax on retail sales.
All new taxes in Colorado must be voter approved, which is why Proposition AA will be on the ballot. While most of the money collected will go to the state, the proposition calls for 15 percent of the 10 percent sales tax to go to local towns and counties where marijuana sales are allowed. Also, the first $40 million generated by the excise tax is to go toward school construction.
"If it doesn't pass then there wouldn't be the excise tax, and no money for school construction," said Pat Steadman, a Colorado state senator who was in Telluride this week as part of a statewide tour to promote the measure. "If there isn't funding from this sales tax, we would be looking at other state revenues. So paying for the costs of legal marijuana would come out of the [state's] general fund."
The Prop AA taxes would be on top of other state and local sales taxes, so the actual taxed percentage would vary depending on where they are applied.
Though Steadman said estimates show that the excise tax would only generate around $27.5 million in its first year, he thinks it is an important part of making recreational marijuana work. He said with a strong tax structure in place, recreational marijuana will stand up better to scrutiny – especially from the federal government, which still defines marijuana use as illegal.
In Colorado, Steadman said the marijuana taxes would be similar to those placed on tobacco products. Tobacco sales in Colorado have a 34 percent sales tax.
Though officials have said they don't expect retail marijuana to add much to the state's general fund, some local growers think the taxes are too high.
"I am all for taxation of this industry – just not at that level," said Adam Raleigh, owner of the Telluride Bud Company. "I would like it to be taxed at alcohol levels, not at tobacco levels. The sheer volume [of tax revenue] alone that is going to create is enough to not have to gouge the mom and pop stores."
With the proposition, the state expects retail marijuana to at least cover its administrative costs, according to a state fact sheet on AA.
Many of the proposition's projections about how much money will be generated are based on what has been seen with medical marijuana, which has been technically legal in Colorado since 2000.
Depending on how high or low marijuana sales end up being, the proposition allows the state to raise or lower the tax rate if it passes, but it cannot exceed 15 percent for excise tax portion.
"I actually think in the future as the market takes off, we'll look at lowering the rates," Steadman said. "Because there's quite a bit of revenue that's expected to be generated off of this. I think having money available to study the phenomenon is very important. Social scientists and public health researchers are really interested to see what happens."
The passage of Amendment 64 last November made it legal for adults 21 and older in Colorado to possess up to 1 ounce of marijuana.
In September, the Town of Telluride and San Miguel County decided to allow retail sales, while the Town of Norwood banned them and Mountain Village placed a moratorium on sales until its town council has time to review all of its options.
News Hawk- Truth Seeker 420 MAGAZINE ®
Source: telluridenews.com
Author: Collin McRann
Contact: Telluride Daily Planet > Our Newspaper > Contact Us
Website: Telluride Daily Planet > News
