Colorado May Have To Refund As Much As $30 Million In Pot Taxes

DENVER (AP) — Colorado’s cannabis experiment was created to gain revenue for the state and its schools, but a state law may put some of the tax money directly into residents’ pockets, making a bit of a mess for lawmakers. The state constitution restricts how much tax money the state can take in before it has to give some back. That means residents Colorado may each get their own piece of the $50 million in recreational marijuana taxes received in the first year of legal pot. It’s a situation so out of the box that it’s gotten Republicans and Democrats, for once, to agree on a tax issue.Even some marijuana shoppers are shocked Colorado may not keep the taxes that were promised to go toward building and fixing schools when voters legalized back in 2012.

“I have no problem paying taxes if they’re going to schools,” stated by Maddy Beaumier, 25, who was stoping by a dispensary near the Capitol.

But David Huff, a 50-year-old carpenter from Aurora, states taxes that add 30 percent or more to the value of marijuana, depending on the jurisdiction, are too high.

“I don’t care if they write me a check, or refund it in my taxes, or just give me a free joint next time I come in. The taxes are too high, and they should give it back,” Huff mentioned.

Legal marijuana has clashed with the tax limitation movement because a 1992 voter-passed a constitutional amendment called the Taxpayers’ Bill of Rights requires all new taxes to go before voters.

The modification also include Colorado to pay back taxpayers when the state receives more than what’s granted by a formula based on inflation and population expansion. Over the years, Colorado has given refunds six times, making and end result of more than $3.3 billion.

Republicans and Democrats say there’s no solid excuse to put marijuana taxes back into people’s hands, and state officials are trying to figure out how to go around distributing out the money. It may have to be established by asking Colorado voters, for a third time, to make a ballot on the issue and clear marijuana taxes from the refund condition.

Republicans accept that cannabis is throwing them off their usual point of wanting tax money returned to taxpayers. But they also go to say that pot should  for itself — that general taxes shouldn’t pay for things like increased drug knowledge and improve training for cops and law officials to identify drivers under the influence if marijuana.

“I think it’s appropriate that we keep the money for marijuana that the voters said that we should,” states Republican Senate President Bill Cadman. His  group is against keeping other refunds based on the Taxpayers’ Bill of Rights but defends a special ballot question on marijuana taxes.

“This is a little bit of a different animal. There’s a struggle on this one,” said Sen. Kevin Grantham, one of the Republican budget writers.

After legalizing pot in 2012, Colorado voters came back to the polls the following year and authorized a 15 percent surcharge tax on marijuana for the schools and an additional 10 percent sales tax for lawmakers to use.

Voters were made aware that these taxes would make about $70 million in the first four quarters. The state now is convinced it will generate about $50 million.

But because the economy is doing well  and other tax companies are expanding rapidly, Colorado is compelled to give back a good amount of what it has received. Final numbers aren’t established, but the governor’s budget writers assume the marijuana refunds could see up to $30.5 million, or about $7.63 per adult in Colorado.

“It’s just absurd,” stated Democratic state Sen. Pat Steadman, one of the Legislature’s budget writers.

The head-scratching reaches to Colorado’s cannabis industry. Different industry groups strongly campaigned for the marijuana taxes but are not taking a stand point on whether to refund them.

Mike Elliott of the Denver-based Marijuana Industry Group states it is not asking for lower taxes, but that’s an option lawmakers don’t seem to be thinking about. State law does not stop lawmakers from cutting taxes without a vote.

Legislators have a little time to figure out how to go forward. They’ll contemplate marijuana refunds and a independent refund to taxpayers of about $137 million after receiving final tax assessments that are due in March.

When they converse about marijuana refunds, they’ll have to investigate if the capital would go to all taxpayers, or just those who bought cannabis. Prior refunds have basically been paid through income tax returns, but Colorado also has helped bring down motor vehicle fees or even cut back sales taxes on trucks.

Lawmakers seem content that the refund system won’t matter because voters would allow marijuana taxes a third time if the question was brought up.

“This is what the voters want, and if we’re going to have (pot), and the constitution says it’s legal, we damn well better tax it,” Steadman said.

Clarification: A Huffington Post headline has been amended to reflect that overall tax revenues, rather than a surfeit of marijuana-specific tax revenues, would trigger the refund under current law.

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