Tax revenues from recreational marijuana sales are either wildly exceeding expectations or dramatically falling short, depending on who is talking. It is a difficult task budgeting revenues on a previously illegal product, combined with concerns about a mandatory refund under TABOR, if revenues come in too high compared to expectations.If pot taxes exceed the $67 million estimate stated in the official analysis of Amendment 64, then some or all of the taxes will be refunded to Colorado taxpayers if a ballot measure is not approved to allow the state to keep the excess.What tax type being measured and against what expectation has resulted in a mix of headlines locally and nationally about Colorado’s marijuana legalization efforts. A Sept. 2 report from the CBS station KCNC in Denver was titled ìRecreational Pot Not Bringing in Tax Money That Was Expected.î However, on the same day, KRDO in Colorado Springs reported that ìthe revenue has exceeded what was originally estimatedî in Pueblo County. Part of the reason for the confusion is that retail marijuana is taxed by the state, county and city where the store resides. Each level of government must create a revenue budget. If that budget is exceeded, TABOR limits apply and some of the money must be refunded by that government. If the state’s overall revenue is over budget, then the newest taxes ñ 2012 Amendment 64’s taxes ñ must be refunded first, according to the 1992 TABOR amendment.Recreational marijuana purchased in Manitou Springs, the closest current retail establishment to Falcon, is charged the 2.9 percent state sales tax, 2.23 percent county sales and the Pikes Peak Rural Transportation Authority taxes, and 3.9 percent city sales tax. Additional marijuana-specific taxes are added, including a 10 percent state marijuana tax and a 10.4-percent city marijuana tax, according to tables published by the Colorado Department of Revenue. The dispensary will have also paid a 15 percent excise tax to the state when they purchase the inventory from the grow operation. The 29.43 percent tax paid by the consumer directly and the 15 percent paid by the dispensary for inventory makes retail recreational marijuana only slightly more expensive in taxes than hard liquor, according to the CDR and the marijuana activist organization, Just Say Now.Challenges for dispensaries in calculating and paying taxes continue because of a hesitation in bringing on pot clients in the accounting and banking industries. ìWe don’t have any marijuana industry clients, and I was told specifically by my partner not to bring in any marijuana clients,î said Cary LeVigne of Accounting Pros, a Colorado Springs bookkeeping and tax business. ìThere are too many things going on in that industry that we don’t want to be a part of. I can’t speak for other accountants if they’ll accept them, but I’m not familiar with anyone who has taken on those clients.îUniversity of Alabama law professor Julie Anderson Hill presented her paper ìBanks, Marijuana and Federalismî at a conference on marijuana law at Ohio’s Case Western University in September. Banks can be held criminally liable within the existing federal ban on marijuana for being an accessory to marijuana distribution, she said.ìBecause financial institutions won’t allow marijuana-based businesses to open accounts, the industry largely operates on a cash only basis ñ- a situation that seems likely to attract thieves and tax cheats,î Hill said.
