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Tax-Free Marijuana on Sale Today in Colorado

  • Sep 16, 2015 | Gail Cole

 For one day only in Colorado, recreational pot is hardly taxed at all.

State sales tax holidays generally promote items people need, like school supplies and clothing and, in natural disaster-prone areas, emergency preparedness supplies. Some sales tax holidays are designed to encourage people to exchange energy-gobbling appliances for leaner, greener machines. The most curious sales tax holidays to date have been those promoting the Second Amendment (get yer guns tax-free). But even these seem downright mundane when compared to Colorado’s Retail Marijuana Tax Reduction Day.

On September 16, 2015 (today), the 10% special state retail marijuana sales tax and the 15% state retail marijuana excise tax rates are reduced to 0% in Colorado. These tax rates return to normal on September 17, 2015 (tomorrow).

The Colorado general state sales tax (2.9%) and any taxes levied by local jurisdictions (of which there are many in Colorado) remain in effect on September 16.

This unusual sales tax holiday is due to a provision in Colorado House Bill 15-1367, which reads in pertinent part:

“If, for the fiscal year 2014-15, fiscal year spending is greater than twelve billion eighty million dollars or if the Revenue from retail marijuana taxes is greater than sixty-seven Million dollars, then on September 16, 2015, the rate of the tax imposed under subparagraph (i) of this paragraph (a) is reduced as specified in section 20(3)(c) of article x of the state constitution. On September 17, 2015, in accordance with paragraph (b) of this Subsection (1) and the authority that the voters conferred through their approval of Proposition AA at the November 2013 election, the rate is increased back to ten percent and fifteen percent for state retail marijuana sales tax & state retail marijuana excise tax respectively.”

So there it is. Stock up if you will at one of Colorado's 380 recreational pot dispensaries (there are also 480 licensed recreational pot growers).

Nearly twenty states are offering more than two dozen sales tax holidays in 2015. Like the retail marijuana tax reduction day, these tax-free periods are a good deal for consumers and a compliance nightmare for sellers.

photo credit: lemon kush, day 64 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.