November 7, 2014

Marijuana Tax Rebate Expected In Colorado

November 7, 2014
marijuana cash industry banking

marijuana cash industry bankingIn Colorado, the ‘Taxpayer’s Bill of Rights’ provision requires a rebate whenever revenue is higher than projected. That was the case with marijuana taxes, which exceeded expectations this year. Below is more information, from Colorado.Gov:

The proposed budget also accounts for two rebates required by the Taxpayer’s Bill of Rights (TABOR) of $167.2 million, assuming current law and the September forecast by the Office of State Planning and Budget. These include $30.5 million in the current fiscal year for new marijuana taxes. Total state revenue is higher than projected in the election blue book for 2013’s Proposition AA. Because the estimate was low, under TABOR, the state must refund the money being collected or ask voters again to keep it. Meanwhile, current revenue projections indicate a $136.6 million refund for revenue above the Referendum C cap in FY 2015-16. If they materialize, these rebates would go out under existing formulas via tax credits or sales tax refunds when people file their 2016 taxes.

A lot of marijuana media outlets and organizations praised Colorado Governor John Hickenlooper for making this rebate possible, but he actually has nothing to do with it. The rebate is mandated, so whether John Hickenlooper likes it or not, that rebate is required unless Colorado citizens vote to give the money back to the state. I’m not sure what people were thinking when they lavished such praise on Colorado’s Governor, considering that the same press release that described the amount of the rebate also stated the following:

As it relates to the marijuana rebate, Hickenlooper said “It will be important to engage the legislature when session begins on the issue of marijuana rebates, and at this time, it would be unwise for the state to plan to spend any of those funds in advance of that discussion.”

Essentially, Colorado’s Governor punted the issue down the road and has deferred to the Colorado Legislature to determine how the rebate will happen. This is the same Governor that recently called marijuana legalization ‘reckless,’ so I’m not surprised that he wants to delay the marijuana tax rebate. Nonetheless, it’s a great thing for Colorado taxpayers. Not only does legalization in Colorado generate jobs, boost local economies, save Colorado huge sums of money by not directing that money towards marijuana enforcement, it also is resulting in higher tax revenues than expected. Why is every state not doing this?


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