Weed Wednesday

On September 16, 2015 the 10% state retail marijuana sales tax and the 15% state retail marijuana excise tax rates will be reduced to 0%. The 2.9% state general sales tax and any tax levied by local jurisdictions must still be levied on September 16, 2015.

Really, a sales tax holiday for Marijuana? Just wait until you read why!

This is a tax reduction for one day only and is due to the requirements of Colorado House Bill 15-1367, which states:

If for the fiscal year 2014-2015, fiscal year spending is greater than twelve billion eighty million dollars ($12,080,000,000.00) or if the revenue from retail marijuana taxes is greater than sixty-seven million dollars ($67,000,000.00), 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.

That is right – sales greater than $67M!

Colorado began selling marijuana in January 2014, and has collected over $117M in excise taxes since the start date per the Colorado DOR website. While this amount is small in comparison to the annual budgets that encompass all jurisdictions within Colorado, $117M in unplanned excise tax collections from recreational use of marijuana certainly does not hurt!

The Huffington Post recently reported that the State of Colorado designates a significant part of the marijuana excise tax revenues to the local school systems, providing them with over $23M in funds to support the “Building Excellent Schools Today” (BEST) grant program. This provides “needy” jurisdictions with grant money to bring school communities and systems up to par with their higher performing schools.

Additionally, Matt Ferner, with The Huffington Post, writes how the “blunt bucks” have contributed over $8M to assist with medical marijuana research, specifically, the effects of cannabis oil. So all in all, the legalization of marijuana for recreational use in the state of Colorado has been a success. J. Skyler McKinley, deputy director of Colorado Gov. John Hickenlooper's (D) Office of Marijuana Coordination, told the Huffington Post, “Colorado officials look at marijuana the same way they look at any other commodity market in Colorado -- just another place where the state gets some revenue, but doesn't stake its whole budget on it.”

So if you are in or around Colorado, make sure you are taking advantage of this sales tax break and support your local marijuana retailers on “Weed Wednesday,” September 16, 2015.

Want to learn more about Colorado sales tax? Read our blog EYE ON Colorado Sales Tax.