Enjoy this glimpse into a very unusual section of tax law. It’s about as close as this firm gets to partying.
On September 16th, marijuana sellers and buyers in Colorado had a really great day. Thanks to a one-time glitch in the state constitution, the usual 10 percent state cannabis tax was revoked for 24 hours.
It was like the Black Friday of pot.
The state lost out on about $3.7 million just because of this one-day break.
But they’re not hurting too badly, really. Colorado’s marijuana industry is booming, bringing in about $96 million in revenues in July alone. The state is actually raising more money from pot than from alcohol.
Of course, with regulation comes taxation. (Doesn’t it always?)
The big question: How to handle revenues from marijuana sales? In Colorado, the Taxpayer’s Bill of Rights requires the state to give back money from new taxes when revenues are higher than expected – and that means $66 million in marijuana taxes could potentially go back to the public instead of to schools or government projects.
In November, voters will decide whether or not the state has permission to keep that extra money. Well, let’s be honest here. What would YOU decide?
Let it be emphasized that either way, the government is making a killing off the new pot industry. At this point, projected marijuana tax revenues for 2015 are $125 million. So far, the state has collected $73.5 million, with $19.6 million going towards public school funding. That’s up from last year, where $13.3 million total of marijuana funds went to public education.
It has to be asked: If marijuana pays for school, can it truly be said that pot makes you dumb?
Regardless, the whole situation in Colorado is interesting – because as more states eventually legalize and regulate cannabis (and they will), it will be up to us to figure out what taxing pot looks like.
It could be, too, that as marijuana becomes destigmatized and available everywhere, the whole “gold rush” feeling of the industry will die down and it will just become another boring crop. But we sort of doubt that.
What do you think lies ahead for the brave new world of legal marijuana? Do you think it’s worth the tax?
If you have any questions about tax law (but preferably not about pot), give us a call at 844-841-9857, or schedule a free consultation here.