September 16, 2015 will mark an unprecedented day in Colorado tax history. On that day, all sales of recreational marijuana will be free of excise and sale taxes.
The one-day tax break is similar to other "tax holidays" other states schedule, but in Colorado, the holiday is a result of specific state tax laws. In 2014, Colorado collected $58 million in marijuana taxes. That fell short of the projected $70 million, but because overall state taxes exceeded official projections, the state is required to ask voters for permission to keep the money. Because lawmakers must also start the fiscal year with taxes reverted to zero, state officials agreed on a tax free day for all recreational marijuana purchases.
In 2013, voters passed a 25% tax on marijuana sales: 10% sales tax and a 15% excise tax. Neither of these taxes will be applied to purchases on September 16. According to ABC, this break can result in an approximate $20 decrease in one ounce of mid-grade marijuana. Many dispensaries are already expecting a spike in sales. "Once our lawyer said, no, we really are doing this, we started getting ready. We're thinking there will be huge crowds," said Cheri Hacket, owner of Botanacare in Northglenn.
The 2015 Boom in Marijuana Tax Revenue
When Colorado marijuana tax revenue fell short of projections in 2014, many were quick to point out that the tax boon that was promised with legalization was a bust. Those critics, however, have already been proven wrong in 2015, when marijuana tax revenue is booming.
In the first four months of this year, there was $44 million of marijuana tax proceeds. That is a dramatic increase from 2014's $25 million recorded over the same period of time. If the trend holds steady, Colorado will finally capitalize on the spike in tax revenue voters counted on back in 2013.
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