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Colorado: Home Rule Extends to Marijuana Sales Tax

  • Sep 24, 2015 | Gail Cole

 It's legal and taxable in Colorado.

Do local tax jurisdictions in Colorado have the authority to levy sales tax on specific products, notably recreational marijuana? According to the Adams County District Court, they do.

In November 2014, voters in Adams County approved a ballot measure allowing the county to collect an additional 3% tax on retail sales of recreational marijuana, beginning July 1, 2015. The cities of Aurora, Commerce City and Northglenn then filed suit against Adams County for an alleged “unconstitutional imposition of a sales tax targeted only at recreational marijuana.”

Marijuana sold in Aurora and Northglenn is already subject to 2% city sales taxes in addition to state and county taxes. Commerce City imposes a 7% tax on all cannabis products. The three municipalities claim the additional county sales tax puts pot stores in these cities “at a competitive disadvantage.” They also argued that the state constitution does not grant Adams County authority to levy a tax on a single product.

On Wednesday, District Judge F. Michael Goodbee ruled in favor of the county, saying that the tax was permitted because the Colorado legislature had “not chosen to exempt the sales of retail marijuana from any county sales tax.”

photo credit: mind if i do a j? via photopin (license)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
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.