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The Associated Press said: The tax break is happening because Colorado underestimated overall state tax collections last year. Under the state constitution, the accounting error triggers an automatic suspension of any new taxes — in this case, the recreational marijuana taxes voters approved in 2013.
Of course taxes return to a hefty 25 percent on Thursday. However the Marijuana Policy Project called today’s sales tax holiday “a much-deserved day off” for marijuana consumers—who carry a heavier tax burden than people who buy alcohol.
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Commercial cannabis is taxed at a much higher rate than booze— 25 percent. Plus there’s also statewide and local sales taxes added on top of that. Alcohol is taxed by volume— from 8 cents a gallon for beer to $2.28 a gallon for liquor, plus sales taxes.
Anyhow Channel 9 news in Colorado reports that the total estimated revenue loss from retail marijuana will be $3.7 million. Whoa. They also report that experts expect that retail shops, that run their own grow operations will stockpile their weed at the growing operation until Wednesday when the retail side won’t have to pay a 15 percent excise tax and really maximize today’s tax holiday.
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The path of legalization if fraught with error.