Colorado Pot Tax May Exceed 30 Percent

Today, a Colorado House-Senate committee will finish its draft of a bill to implement marijuana legalization. But debate on one issue has already closed: The committee decided on Friday to recommend a 30 percent tax on legalized marijuana sales, a rate that critics believe could force consumers to buy on the black market. The Denver Post explained the committee’s rationale for such a high tax: The sales taxes would be used to pay for enforcing marijuana regulations, ranging from rules about who can be in the pot business to controls on how pot is grown and limits on how pot shops can advertise. Sales taxes would also pay for educational efforts about the potential health dangers of marijuana use. The 15 percent marijuana sales taxes would be in addition to the statewide 2.9 percent sales tax and any additional local sales taxes. Proponents of legalization mostly agree that a reasonable tax policy will allow state regulation of the new industry to operate sustainably. Critics, however, argue that a tax rate upping the cost of one gram of recreational marijuana from $11 to $14 could keep sellers underground, where a robust, tax-free black market already exists. Colorado lawmakers must approve the bill by November, when it is set for public vote. But the Post suggests that Colorado voters may frown upon the higher rate: Some lawmakers on the marijuana committee feared that Coloradans would reject one or both tax measures, leaving the state with a hefty tab for enforcing pot sales but little cash to pay for it. Colorado's Taxpayers' Bill of Rights requires the public to OK tax hikes, and Coloradans have been known to reject taxes even for popular state services, such as K-12 education.