State lawmakers approved a bill Monday that would allow counties to levy and collect sales tax on recreational marijuana, a move inspired by a standoff between Adams County and three of its cities that could wind up in the state Supreme Court.
The measure, if signed into law by Gov. John Hickenlooper, would allow counties to impose a pot tax in unincorporated areas without challenge but would have to enter into an intergovernmental agreement with cities and towns to tax weed there.
Adams County caught the wrath of Commerce City, Northglenn and Aurora in 2015 when the three cities challenged the county’s decision to impose a 3 percent tariff on recreational pot sold throughout the county, regardless of whether municipalities had already instituted their own marijuana sales tax.
The cities argued in their lawsuit that by layering an additional tax on a transaction, Adams County was putting their marijuana businesses at a competitive disadvantage to shops in nearby counties that didn’t have to charge an additional levy.
“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.
The appeals court agreed with the cities, ruling that even though the tax was approved by Adams County voters, the county “does not have either constitutional or statutory authorization to impose a special sales tax on retail marijuana.”
Rep. Steve Lebsock, D-Thornton, the bill’s sponsor, said he hopes his measure serves as an acceptable workaround while Adams County continues its legal fight with its cities.
Adams County has been collecting the tax since it first went into effect in July 2015.
County spokesman Jim Siedlecki said it has continued to do so even after the appeals court decision in December, He said more than $1.5 million has been collected so far and “is tracked separately” in the county’s general fund.