Colorado's lower taxes on medicinal marijuana are hindering projected tax revenue from recreational pot sales, according to a recent study released by the state's Department of Revenue.
Prior to recreational sales becoming legal in January, voters last fall overwhelmingly passed a measure placing special excise and sales taxes on recreational marijuana. The fiscal analysis appended to the ballot measure predicted the state would rake in about $33 million in taxes in the first six months of 2014.
But according to the Department of Revenue study, the state brought in about $12 million in tax revenue from recreational pot sales through June.
The report, which a special legislative commission pored over Tuesday, found that most of the state's recreational marijuana sales were being derived from tourists traveling to the state. Moreover, it notes that recreational marijuana is not pulling users out of the medicinal marijuana market.
“Higher taxes on recreational pot than those on medical pot is a reason,” said state Rep. Dan Pabon (D-Denver). “We might need to also look at exploring taxation on medicinal.”
Medicinal marijuana has been legal in Colorado since 2000, much longer than recreational marijuana.
Pabon, who has sponsored and helped to pass legislation to regulate recreational marijuana sales, said Tuesday that estimating tax revenue from recreational marijuana was a “work in progress” and that “there are concerns about how we actually estimate possible tax revenue.”
“If another lawmaker from a different state came to me and said, 'I want legal marijuana sales because of the tax revenue for my state,' I'd certainly make it known for them to take caution. It's not what people expected,” Pabon said.
Most sales tax revenue brought in by recreational marijuana is set to go toward Colorado school construction projects.
———————-
Copyright 2014 – Los Angeles Times
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Tags: Legislation, Taxes
