Three cities — Aurora, Commerce City and Northglenn — this week sued Adams County for what they claim is the unconstitutional imposition of a sales tax targeted at recreational marijuana only.
The cities are asking a judge to void the 3 percent retail pot tax Adams County voters approved in November, which is set to go into effect July 1.
Aurora and Northglenn each impose a 2 percent sales tax on recreational marijuana while Commerce City, whose city council is set to vote in favor of such sales at its meeting on Monday, imposes a 7 percent tax on the sale of all cannabis products.
The municipalities argue in the suit that Adams County doesn’t have the authority under the state constitution to levy a tax on just a single product and that doing so will put the “cities’ businesses at a competitive disadvantage” with other Colorado retail pot stores.
Adams County already imposes a regular sales tax rate on all items, including marijuana, sold anywhere in the county.
“No statutory or constitutional authority exists for a special sales tax, that is, a sales tax on particular types of items or transactions, such as a special marijuana sales tax,” the suit claims.
Adams County spokesman Jim Siedlecki said voters in each of the municipalities in the county approved the county’s sales tax on pot sales.
“We are simply applying the will of our voters,” he said. “This is what they approved.”
Siedlecki said the county will file a response in Adams County District Court this week in anticipation of a hearing on the matter next week.
The county let a 16-month ban on recreational marijuana expire at the end of 2014 after voters approved the 3 percent special sales tax.
Adams County is in the midst of issuing licenses to 10 marijuana establishments — including stores, grow facilities and infused product manufacturing facilities — in unincorporated areas.
The county’s tax is projected to bring in about $1.2 million in its first year.
With the county special tax, Northglenn retail marijuana consumers would pay 23.75 percent in taxes on retail pot. They currently pay 20.75 percent in total taxes — 10.75 for state, city, county, special district taxes and 10 percent for the Colorado excise tax on retail marijuana sales.
In Aurora, cannabis customers who buy marijuana at one of the four Adams County locations would pay 23.50 percent in taxes starting in July.
The lawsuit points out that a Colorado Senate bill, which would have given counties “the specific statutory authority to impose a special marijuana sales tax,” never made it out of committee during this year’s session.
John Aguilar: 303-954-1695, firstname.lastname@example.org or twitter.com/abuvthefold