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Colorado's cannabis taxes go up in smoke for a day Colorado's cannabis taxes go up in smoke for a day
(35 minutes later)
An accounting error is paying off for marijuana consumers in Colorado, where a quirk in the law has prompted the US state to suspend most taxes on recreational cannabis for the day. An accounting error is paying off for marijuana users in Colorado, where a quirk in the law has prompted the US state to suspend most taxes on recreational cannabis for the day.
The one-day tax holiday means Colorado will not collect 10% sales taxes on cannabis. It is also suspending a 15% excise tax on marijuana growers.The one-day tax holiday means Colorado will not collect 10% sales taxes on cannabis. It is also suspending a 15% excise tax on marijuana growers.
The tax break is happening because Colorado underestimated overall state tax collections last year. Under the state constitution, the accounting error triggers an automatic suspension of any new taxes – in this case, the recreational marijuana taxes voters approved in 2013.The tax break is happening because Colorado underestimated overall state tax collections last year. Under the state constitution, the accounting error triggers an automatic suspension of any new taxes – in this case, the recreational marijuana taxes voters approved in 2013.
Retailers hoping for big crowds are rolling out bargains to attract shoppers. The taxes revert to 25% on Thursday.Retailers hoping for big crowds are rolling out bargains to attract shoppers. The taxes revert to 25% on Thursday.
Wednesday’s break comes a day after Colorado finalised its accounts for the fiscal year that ended in June. The figures covered the first full fiscal year in which over-21s could legally buy marijuana and alcohol.Wednesday’s break comes a day after Colorado finalised its accounts for the fiscal year that ended in June. The figures covered the first full fiscal year in which over-21s could legally buy marijuana and alcohol.
Alcohol excise tax collections were up 2.4% to about $42m (£27m); marijuana-specific taxes were about $70m. The figures do not include a state-wide 2.9% sales taxes.Alcohol excise tax collections were up 2.4% to about $42m (£27m); marijuana-specific taxes were about $70m. The figures do not include a state-wide 2.9% sales taxes.
In other words, alcohol probably produces more overall tax money than cannabis, though the state does not keep data on how much general sales tax comes from alcohol. Recreational cannabis is taxed much more steeply than alcohol.In other words, alcohol probably produces more overall tax money than cannabis, though the state does not keep data on how much general sales tax comes from alcohol. Recreational cannabis is taxed much more steeply than alcohol.