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Reefer Refund: Colorado May Give Back Cannabis Tax Revenue

Ryan Allway

April 2nd, 2015

Policy, Top News

Colorado may have raked in millions of dollars worth of tax revenue from the sale of medical and recreational marijuana, but a strict anti-spending provision in the state’s constitution may force it to hand that money back to the public.

The so-called Taxpayer Bill of Rights was approved back in 1992 and requires the government to give money back to taxpayers when it collects more money than it anticipated. But refunding nearly $60 million in marijuana tax income would divert it away from school construction and other needs that had been depending on marijuana taxes and force the state to pay for them out of its general fund.

In a rare bipartisan effort, legislators are assembling a bill that would seek voters’ permission to hold onto the marijuana tax revenue, despite the Taxpayer Bill of Rights. Some anti-tax groups vowed to fight the effort, even if the refund would only amount to $11 or less per person, due to the state’s strong anti-tax sentiment.

Many marijuana businesses believe that taxes on their products are too high and are helping keep the black market alive. In Colorado, the government taxes the plant at a 15% excise tax based on the average wholesale market rate, a 10% state tax on retail sales, a state sales tax of 2.9%, and local taxes like Denver’s 3.5% tax. The combined rate can significantly eat into margins for many small businesses.

In the end, it’s likely that the state will find a way to keep the excess marijuana taxes, given the strong desire by all sides to do so. Even if the government were forced to pay back the taxes, it’s uncertain how they would do so, since the law is written vaguely, which means the refunds would likely to tied up for some time to come.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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