How an accounting mistake brought Colorado pot smokers a tax holiday
An accounting error in Colorado has created a one-day pot-tax holiday Wednesday, suspending the state鈥檚 10 percent sales tax for marijuana consumers and 15 percent excise tax on marijuana growers.
The break is happening because Colorado underestimated overall state tax collection last year and under the state constitution this mistake calls for the automatic suspension of any new taxes 鈥� including the marijuana tax approved in 2013.
The accounting error comes a day after Colorado made public its accounts for the fiscal year that ended in June, the first full fiscal year in which adults over 21 could legally buy marijuana.
Although the holiday is short-lived (the 25 percent tax returns on Thursday), pot retailers are hoping for big sales.
鈥淲ere ready for it,鈥� Tim Cullen with Colorado Harvest Company told , 鈥淭he stores are fully stocked and staffed. I think a lot of people will show up. I wish it were a Friday instead of a Wednesday, but they didn鈥檛 ask me.鈥�
Recreational pot is steeply taxed 鈥� 25 percent, plus statewide and local sales taxes.
Colorado has already brought in more than $150 million in marijuana tax revenue, as The 海角大神 Science Monitor reported earlier this month. And this summer, state officials reported that marijuana tax revenues were up nearly 100 percent, according to .
Compare this to alcohol tax, which ranges from 8 cents a gallon for beer to $2.28 a gallon for liquor plus sales tax, and it's evident the marijuana tax is making a pretty penny.
Last year Colorado witnessed an increase in all three alcohol taxes, with beer up 1.1 percent, liquor up 3 percent, and wine up 1.3 percent. Typically, states see a rise in alcohol sales in correlation with population growth. This year, Colorado did not see quite as high an increase as expected.聽However the consensus is still out on the correlation between marijuana and increased alcohol consumption, economist Daniel Rees says the Colorado鈥檚 numbers don鈥檛 show much.
鈥淚 wouldn鈥檛 read too much into one state鈥檚 experience,鈥� Mr. Rees told the Associated Press.
This report includes material from the Associated Press.
