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Colorado: New Local Excise Taxes for Marijuana Authorized


 Behind the legalization of pot?

When voters in Colorado approved the legalization of recreational marijuana with the passage of Amendment 64 in 2012, they necessitated the eventual imposition of “an excise tax on marijuana sold or otherwise transferred by a marijuana cultivation facility to a marijuana product manufacturing facility or to a retail marijuana store.” The general assembly is required under Amendment 64 to enact such a tax by January 1, 2017. Consider it done.

On June 4, 2015, Governor Hickenlooper (D) approved House Bill 15-1367, which authorizes each county in the state to levy, collect and enforce the following (in addition to any sales or excise tax imposed pursuant to Section 29-2-103 and Articles 26 and 28.8 of Title 39, C.R.S.):

“[A] county excise tax on the first sale or transfer of unprocessed retail marijuana by a retail marijuana cultivation facility pursuant to this subsection (1) within any municipality that levies such an excise tax pursuant to subsection (2) of this section. The tax shall be imposed at the time when the retail marijuana cultivation facility first sells or transfers unprocessed retail marijuana from the retail marijuana cultivation facility to a retail marijuana product manufacturing facility, a retail marijuana store, or another retail marijuana cultivation facility.”

The tax may not exceed 5% of the average market rate, and it must be approved by popular vote.

The new law also authorizes a metropolitan district with boundaries entirely within the unincorporated area of a county to levy, collect, and enforce a metropolitan district excise tax on the first sale or transfer of unprocessed retail marijuana by a retail marijuana cultivation facility, etc.; the metropolitan tax rate may not exceed the rate levied by the county. In addition, it restricts the levy of the county excise tax in a municipality that already levies such an excise tax at the municipal level. For more specifics, please refer to House Bill 15-1367.

More controversially, the measure creates a one-day tax holiday for marijuana in September 2015.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.