Somethings may seem too good to be true, but this isn’t one of them! Colorado will have a one-day tax holiday September 16, 2015 on recreational marijuana, but there’s more to it than meets the eye.
Will marijuana really be tax-free?
Yes – and no. While the Colorado Tax Payer Bill of Rights (TABOR for short) will require the state to provide a tax holiday from the 10% marijuana tax normally placed on cannabis sales, a 2.7% sales tax still applies, as do medical marijuana and any local cannabis taxes.
Why the cannabis tax holiday?
At the beginning of this fiscal year, lawmakers over-estimated the total amount of income the state would receive from all taxes. While the state actually came in under on the amount of marijuana-related taxes they collected (they estimated revenue of about 70 million and collected around 58 million), TABOR would require refunds sent to all taxpayers. In order to forgo this option, state lawmakers decided on a one-day-only tax holiday on cannabis.
So is 9/16 the new 4/20?
Don’t start blocking off your September 16th because this year’s tax holiday is a one-time only thing. This tax glitch only occurred because lawmakers didn’t know how much tax revenue to expect. Combined with an upswing in the general economy, tax revenue came in over estimates, and weed smokers will reap the benefits.
But fear not; also passed by state lawmakers was a 2% tax reduction to be put into effect in July 2017. State marijuana taxes will be reduced from 10% to 8%, in hopes of reducing black-market sales, meaning cheaper legal weed in the future.