Summary: Colorado has enjoyed a surplus of tax revenue since it legalized the use of marijuana.
Ever since it legalized marijuana, the state of Colorado has enjoyed additional revenue—and now, according to Forbes, the state has reported it’s officially made more money from marijuana taxes than alcohol taxes.
The Colorado Department of Revenue reported that the state earned close to $70 million in tax revenue from pot sales from July 1, 2014, to June 30, 2015. During that same time frame, it brought in $42 million from alcohol taxes.
The state has been tinkering with its marijuana tax policies. It recently created a tax holiday because the state was making too much money from pot taxes. On September 16th certain marijuana transactions were tax-free. According to BBC, the tax rate returned to 25% the following day.
The New York Times explains the state’s constitution triggered the tax-free holiday. In the Taxpayer’s Bill of Rights, new taxes are set back to zero if collections exceed government predictions.
The move will likely cost Colorado anywhere from $3 million to $4 million.
Mason Tvert, the director of communications for the Marijuana Policy Project and co-director of a campaign that supports taxing and regulating marijuana like alcohol, said, “Marijuana taxes have been incredibly productive over the past year, so this tax holiday is a much deserved day off.”
Recreational sales have been booming in Colorado this summer. In June, sales reached $50 million for the first time. In July, sales peaked at over $55 million. For medical marijuana sales, the total figure is $96 million for July and $85 million for June. Roughly $3 million of the July earnings have been earmarked for school construction products.
Because Colorado has raised more in taxes than predicted, voters will now determine whether they should keep the additional revenue or refund it. Depending on the outcome at the polls this November, the money will either be spent on various projects or taxpayers will receive a refund of $6 to $16 dollars each, depending on their income. The remainder will go back to growers, with additional tax breaks being issued to marijuana users.
Tvert added, “It’s crazy how much revenue our state used to flush down the drain by forcing marijuana sales into the underground market. It’s even crazier that so many states are still doing it. Tax revenue is just one of many good reasons to replace marijuana prohibition with a system of regulation.”
Colorado’s financial success has other states scrambling to legalize the herb:
Medical marijuana was recently legalized in Minnesota.
Texas may allow medical marijuana.
But not everyone is on board. In many places, employers have the right to fire employees over medical marijuana use.
Source: Forbes
Photo credit: ABC News