Colorado Cuts Marijuana Tax, Targets Black Market, While Oregon Eyes 20% Tax

Colorado was the first state to legalize marijuana for recreational use, and now it’s passed a marijuana tax relief.

COLORADO:  Colorado is leading again, this time with a permanent tax break on recreational marijuana. The state is lowering the tax from 10% to 8% effective in July 2017, a move that could cut into Colorado’s black market. Colorado was the first state to legalize marijuana for recreational use, and now it’s passed a marijuana tax relief. There is even a one-time tax holiday on September 16, 2015, from the 10% state sales tax.

Gov. John Hickenlooper signed the provisions into law, noting that this should lower the price of legal cannabis. A voter initiative is set too. The question for voters is whether Colorado can keep the estimated $58 million in pot taxes collected this fiscal year. Colorado’s Taxpayer’s Bill of Rights—TABOR—requires the state to issue refunds to taxpayers if the state’s spending or revenue collections exceed the previous projections. To try to avoid the refund requirement, legislators introduced HB 15-1367, creating a ballot initiative to allow Colorado voters to approve of the state keeping the $58 million in marijuana revenue.

Regardless of whether the ballot initiative passes, Colorado did lower the sales tax on marijuana from 10% to 8% beginning July 2017. Eliminating the sales tax for just September 16, 2015 meets constitutional obligations. But even that one day tax hiatus has a price. The tax holiday is expected to cost about $100,000, plus $3.6 million for a one-day elimination of the 15% excise tax.

Read full article @ Forbes

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