Colorado Votes for Pot Sales Tax
Last year, Colorado created quite a stir by becoming the first state that chose to legalize the sales of recreational marijuana. And, this year, it has chosen to set new standards by approving a pot sales tax, stated tax attorneys. Starting Jan. 1st, 2014, the sales of Cannabis will attract an extra tax of 25%. This is when sellers will begin the sale of Cannabis legally. 15% of the tax amount would be an excise tax that would be used for construction of public schools and 10% would be a special tax meant for funding regulation enforcement on the marijuana retail industry.
Tax lawyers have stated that this additional steep tax would be levied over and above the 2.9% retail sales tax already charged by Colorado State. It would be generating an extra $33.5 million in 2014 and another $67 million in 2015, subject to its approval. Although voters have pledged support for this increase, some advocates of marijuana feel that levying such steep taxes would just force more people to obtain their marijuana from the black market.
The Tides have Turned
The funny thing is, many of these same people are the ones who were OK with attacking the cigarette industry in the late 1990s from the failed Clinton Administration. Now governments across the landscape depend on cigarette smokers because they require that tax revenue to support social programs which only give people another reason to not find a job. Why work when so much is free?
In the words of Rachel Gillette, executive director of the National Organization for the Reform of Marijuana Laws’ Colorado Chapter, there are a couple of things that could be responsible for incentivizing the black market, making it survive or thrive. These include the excessive degree of taxation that would push the prices of marijuana northwards as well as the ban on retail sales in local communities. A tax attorney has stated that the average price of an ounce of Marijuana would be $200 at any pot retail store in Colorado. With existent taxes, the amount would be $230. And, these fresh taxes will take it to about $250. If you add local and state taxes, the figure is all slated to look and be bigger.
In November 2012, Colorado and Washington State legalized possession of recreational marijuana of a maximum of one ounce for people who are 21 years or older. This decision was taken despite the fact that pot is illegal according to federal Law.