AURORA | Aurora and two other cities lost a legal challenge last week against the newly enacted Adams County recreational marijuana sales tax.
Adams County District Court Judge F. Michael Goodbee issued the ruling Wednesday, Sept. 23, finding that Adams County “has the statutory authority to enact, collect, and enforce a retail marijuana sales tax within its boundaries.”
Aurora, Northglenn and Commerce City sued the Adams County Board of Commissioners earlier this year after Adams County voters approved a 3-percent county sales tax in the November 2014 election. The three municipalities — each with retail marijuana shops in Adams County — argued the county does not have the authority to tax recreational marijuana.
In June, a judge declined to issue an injunction to preclude collection of the taxes. Aurora had argued that the Adams County sales tax puts marijuana retail shops within Adams County at a competitive disadvantage to those in the non-Adams County portions of the city. City staff also contend that collection of the Adams County marijuana tax impacts Aurora’s ability to impose its own special sales tax on retail marijuana.
Earlier this month, Aurora City Council introduced an ordinance to amend the city’s tax code to not recognize “any sales tax on a transaction not subject to collection by the City or the State of Colorado.” The ordinance would have created a de facto injunction by barring the city from collecting “any sales tax that is not lawfully imposed and administered.”
In a recent budget hearing, city officials noted that the ordinance would only be of legal value in notifying Adams County that the City of Aurora would not do anything to enforce collection of the tax. But at the same time, there’s little Aurora can do to preclude Adams County from collecting marijuana sales tax revenues from the affected businesses.
READ (PDF): Adams County District Court Judge’s ruling on the Aurora-Adams County marijuana sales tax case.