Two-thirds of Colorado voters approved excise and sales taxes on retail marijuana two years ago with Proposition AA, with the expectation of $70 million in revenue per year.
Now it seems voters will have to act again if the state is going to be able to keep any of the first fiscal year’s worth of marijuana state tax collections, which are comprised of a 15 percent excise tax and a 10 percent sales tax.
Why? Chalk it up to a peculiar wrinkle in the Taxpayer’s Bill of Rights and an innocent-sounding reference to the Colorado state budget in the 2013 Blue Book, which explains ballot measures. The Blue Book mentioned a figure for the total state budget that turned out to be substantially less than the eventual amount, thanks to the strong economy. And TABOR says that error means all of the first year’s tax collections must be returned.
All of them, mind you. But fortunately, just for the first year.
Colorado’s marijuana market
Chart: Colorado marijuana sales hit $700 million for 2014
Tricky TABOR: Colorado tax law quirk puts pot refund in spotlight
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So the mandated refund has nothing to do with Proposition AA low-balling the likely pot revenue and misleading voters. In fact, marijuana tax collections for this year are projected to total $58 million, less than the original estimate.
Sen. Pat Steadman, D-Denver, is preparing a measure that will ask voters to let the state keep the marijuana tax. Not only is this what they obviously intended when they approved Proposition AA by a wide margin, but it would also help lawmakers avoid an awkward refund decision.
After all, who exactly should get the refund? Those who paid the marijuana tax? How would they be identified? And why are they more deserving than other Colorado taxpayers who boosted the state budget higher than the Blue Book’s estimate? Severance taxes have been growing faster than almost any other category, so you could just as easily make a case to refund the $58 million to energy producers.
Surely not. Give voters another chance to rule on the marijuana tax and they’ll make the intelligent choice once more.
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