No, this does not mean Coloradans will be singing the praises of the 10% recreational marijuana tax on Sept. 16. In fact, quite the opposite.
According to the Tax Payer’s Bill of Rights in Colorado, any taxation that causes an income larger than the expected is subject to penalties. Removing the recreational marijuana tax on Sept. 16 was one such ‘penalty’.
Be sure to mark your calendars, now! The pot tax holiday is literally a once-in-a-lifetime opportunity.
Are You Serious!?
Here’s how it works: When the Tax Payer’s Bill of Rights was amended following the legalization of recreational marijuana in Colorado, it was amended in such a way that required an estimated amount of revenue the newly legalized tax would generate.
Not having any background models to base upon, the Colorado politicians responsible for setting the estimated figure low-balled it, and by a long shot.
This is also the reason Coloradans will have the opportunity to vote on where the rest of the excess $58M revenue from the tax will go on the 2016 state ballot.
It’s just one of those laws that has been on the books since way back when, but must still be enforced.
Kind of like how public flirting is technically not allowed in San Antonio due to an age-old law in the Texas Constitution. Except – unlike the flirting law – the pot tax holiday provision must be fully enforced.
Signed, Sealed, & Dated
Governor John Hickenlooper signed the bill setting the date just this week. And that’s not all he signed. In that same bill, Hickenlooper signed into law an eventual reduction in recreational marijuana tax from 10% to 8%, beginning in 2017.
The change will be slight at the counter, making a $55 1/8 after tax reduce only to a $54 1/8th, but the effect on the revenue stream will be significant and, heck, every little bit helps, right?
Recreational marijuana will still be subjected to typical state and city taxes on Sept. 16. The bill signed by Gov. Hickenlooper also restricts the pot tax holiday to one day only: Sept. 16, 2015 since the revenue estimate has been amended since the first drafting of the bill that caused the retroactive pot tax holiday, initially.
Feature Image credit: Vancouver Global Marijuana March 2015 – by Stoner Advisory via photopin (license)