Colorado’s marijuana laws were created in order to raise money for the state and its schooling system, but a state law might be putting some of that tax money right back into residents’ pockets!
The state constitution has a limit for how much tax money the state can raise before it has to give some back to the residents of the state. This means that Coloradans may each get their own fair share of the $50 million in recreational marijuana taxes collected in the first year of legal sales. This situation has gotten so strange that even Republicans and Democrats are agreeing on the tax issue.
Even some customer of pot shops are surprised the State might not keep the taxes they promised would go toward schools when voters legalized cannabis in 2012.
“I have no problem paying taxes if they’re going to schools,” said Maddy Beaumier, 25, who was visiting a shop near the Capitol. However, David Huff, a 50 year old carpenter from Aurora, said taxes that add 30% or more to the price of his cannabis, depending on the jurisdiction, is too steep.
“I don’t care if they write me a check, or refund it in my taxes, or just give me a free joint next time I come in. The taxes are too high, and they should give it back,” Huff said.
Legal cannabis has confronted the tax limitation movement because a 1992 voter-approves constitutional amendment named the Taxpayers’ Bill of Rights requires all new taxes to be presented before the voters.
This amendment has also required Colorado to pay back taxpayers whenever the state ends up collecting more than with it allowed by a formula based on population growth and inflation. Throughout the years, Colorado has given out a refund a total of 6 times, adding up to more than $3.3 billion!
Both Democrats and Republicans say that there is no goof reason to give the cannabis taxes back to the people and state officials are hustling to figure out a way to avoid handing out the money. It may end up having to be settles through a vote, for the third time, to cast a ballot on the issue and exempt marijuana taxes from the refund requirement.
Republicans have admitted that cannabis is making them take an unusual position, because normally they would want tax dollars returned to the public. However, they also argue that marijuana should be paying for itself and that the general taxes shouldn’t be footing the bill for things like increased drug education.
“I think it’s appropriate that we keep the money for marijuana that the voters said that we should,” said Republican Senate President Bill Cadman. His party is opposed to keeping the refund based on the Taxpayers’ Bill of Rights, but wants to see a special ballot question on cannabis taxes.
“This is a little bit of a different animal. There’s a struggle on this one,” said Sen. Kevin Grantham, one of the Republican budget writers.
After marijuana was legalized in 2012, voters in Colorado returned to the polls the next year and agree to a 15% excise tax on cannabis for schools and an addition 10% sales tax for lawmakers to be able to spend.
Voters were told the taxes would bring in about $70 milling within the first year. However, the state now believes that have raised about $50 million in the past year.
Since the economy is on the rise and other tax collections are growing even faster, Colorado is now obligate to return much of what it has collected in taxes. Final numbers haven’t been announce yet, but the governor’s budget writers have predicted the refund could total over $30 million, or about $7.63 per adult living in Colorado.
“It’s just absurd,” said Democratic state Sen. Pat Steadman, one of the Legislature’s budget writers.
The confusion is even effecting the marijuana industry with in the state. Several industry groups heavily included the pot taxes as part of their campaign, but haven’t taken a position on whether or not they should be refunded.
Mike Elliot, from the Denver based Marijuana Industry Group, said they aren’t pushing for lower taxes, but that is also an option lawmakers aren’t considering at the moment. State law doesn’t block lawmakers from cutting taxes with a vote however.
State lawmakers don’t have much time to decide on how to proceed from here. They’ll be considering cannabis refunds and a separate refund to tax payers of about $137 million after they receive the final tax numbers which are due in March.
When discussing the refunds, they’ll need to figure out if the money will go to all the taxpayers, or just those of have purchased cannabis. Previous refunds have normally been paid out through the income tax returns.
Lawmakers are confident that the refund mechanism won’t create much of an issue because voters would most likely approve marijuana taxes for a third time if they were asked to vote again.
“This is what the voters want, and if we’re going to have (pot), and the constitution says it’s legal, we damn well better tax it,” Steadman said.
The post Marijuana Is Making Colorado So Much Money They Literally Have To Give Some Back To Residents appeared first on Higher Perspective.