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Marijuana tax take nearly double expected in Colorado Colorado declares tax holiday for marijuana sales
(about 5 hours later)
Sales tax on marijuana in Colorado was so profitable last year that the state declared Wednesday a pot tax-free day. Colorado has temporarily suspended taxes on marijuana after the US state brought in more tax revenue than anticipated.
Tax collected on marijuana sales came to $70 million (£45m), much more than the $40 million (£26m) the state predicted. The tax will return to 25% on Thursday but state law requires an automatic suspension of any new taxes in the event of an accounting error.
The tax will return to 25% on Thursday but state law requires an automatic suspension of any new taxes due to the accounting error. Pot retailers saw large crowds on the pot tax-free day.
Pot retailers are hoping for large crowds on the pot tax-free day.
Colorado became the first state in the US to legalise cannabis, after voters approved the change in 2012.Colorado became the first state in the US to legalise cannabis, after voters approved the change in 2012.
The average savings on Wednesday for a $200 ( £128) ounce of marijuana will be about $20 (£13), Fox31 Denver reports, and a regular 2.9% sales tax will still apply, as will taxes on medical marijuana.The average savings on Wednesday for a $200 ( £128) ounce of marijuana will be about $20 (£13), Fox31 Denver reports, and a regular 2.9% sales tax will still apply, as will taxes on medical marijuana.
The temporary tax break could cost Colorado up to $4m (£2.5m) in revenue.The temporary tax break could cost Colorado up to $4m (£2.5m) in revenue.
"We've seen the numbers down the last couple of days in the stores," Tim Cullen with Colorado Harvest Company told the news channel. The tax holiday also benefited retailers who saw customers line up before the stores opened for the day.
"People waiting for the tax-free day. We're ready for it. The store is fully stocked and staffed. I think a lot of people will show up." "I probably saved $45,000 before lunch," said a smiling Tim Cullen, owner of the Colorado Harvest Co. chain of marijuana dispensaries.
Correction 16 September 2015: An earlier version of this story incorrectly stated the cause of the tax holiday.