DENVER – Colorado voters will be asked in November to weigh in on marijuana taxes for the third time because of complicated constitutional tax requirements.
Gov. John Hickenlooper on Thursday signed legislation that will refer the question to voters, asking the electorate to allow the state to retain an estimated $58 million in marijuana revenue. The total figure could change, however, as economists consider future revenue figures.
The legislation also directs the state to offer a one-day marijuana tax holiday Sept. 16, in which sales tax briefly will be eliminated. The provision aims at solving the “fiscal thicket.”
Voters already approved legalizing and taxing marijuana in 2012 when they passed Amendment 64, authorizing $40 million to be spent on school construction. Then in 2013, voters again approved a taxing scheme for marijuana with Proposition AA, setting the combined sales and excise rates at 25 percent.
But under the voter-approved Taxpayer’s Bill of Rights, revenue from a new tax must be refunded to taxpayers when revenue exceeds projections. State economists in 2013 underestimated tax-revenue receipts when planning for Proposition AA.
“This fiscal glitch that we have with the constitution ... that’s part of the magic of living in Colorado,” Hickenlooper joked at a morning news conference at the Capitol, where the bill was signed.
If voters approve the question this year, $40 million will be sent to school construction projects, as was outlined under Amendment 64. The remainder of the money would be spent on an assortment of functions, including helping with regulating the marijuana industry, assisting law enforcement, contributing to substance-abuse counseling and adding to after-school programs, to name a few.
The legislation signed by Hickenlooper on Thursday also lowers the marijuana sales tax from 10 percent to 8 percent, beginning July 2017. The current 15 percent excise tax remains untouched.
If voters reject the ballot question in November, then $13.3 million would be refunded through a temporary sales-tax reduction, $19.7 million would go back to cultivation facilities, and $25 million would go back to taxpayers, resulting in refunds that could start as low as $6.
“Hopefully voters remain consistent with what they’ve said to date, which is if it’s going to be legal, it ought to be taxed,” said Sen. Pat Steadman, D-Denver, a budget writer who co-sponsored the bill. “By voting ‘yes,’ we keep the taxes in place this first year – schools are winners; kids are winners.”