AURORA | Shoppers at any of Aurora’s 14 recreational marijuana stores will be able to score more green for less Sept. 16, due to an idiosyncratic clause in the state constitution.
Pot shops across the city and Colorado will not charge customers the standard 10-percent sales tax during normal business hours on what could be the marijuana industry’s first and last tax holiday. Aurora will still charge its regular 5-percent city tax on weed despite the state markdowns, according to Robin Peterson, manager of the city’s Marijuana Enforcement Division.
The duty-free day was announced in June after Gov. John Hickenlooper signed a bill with a corresponding November ballot measure that will ask voters whether or not the state can keep taxes generated by marijuana sales. If passed, the measure would allow the state to allocate about $66 million for the general fund, school construction and marijuana awareness efforts. If voters reject the measure on Nov. 3, the sum will be returned to marijuana cultivators, retail stores and state taxpayers via income tax breaks.
“It’s an automatic 10 percent off basically, so I think we’ll see some more customers,” Nelson said.
The basis for a day free of state tariffs on weed is tethered to a subtle rule in Colorado’s Taxpayer Bill of Rights, which mandates that new taxes be voter-approved and that residents be refunded if the state rakes in more money during a fiscal year than originally forecasted. Colorado brought in about $270 million more than expected between July 2014 and June of this year, according to analyses conducted by legislative council staff. The TABOR oddity also requires any approved taxes — such as those on marijuana — be temporarily nullified 100 percent, which is what led to the single day of breaks. Legislative officials circled Sept. 16 for the tax holiday due to that being the first day they will have the audited revenue numbers for the past fiscal year from the state comptroller’s office.
The state estimates it could lose about $100,000 in sales tax revenue and more than $3 million in excise tax revenues because of the holiday. Pot cultivators and retailers are also exempt from the state’s 15-percent excise tax during the short recess, a financial quirk that officials have anticipated many stores will take advantage of.
However, Elan Nelson, head of business strategy and development for Medicine Man on South Havana Street in Aurora, said she expects that store to operate as normal during the respite. She said she expects a slight spike in sales as a result of promotions and heavy media attention regarding the savings.
“It’s an automatic 10 percent off basically, so I think we’ll see some more customers,” Nelson said.
Of the 24 business licenses city officials approved to be dispensed, there were 14 pot shops open for business in the city as of Aug. 25, according to the Aurora Marijuana Enforcement Division.
amazing what the masses get excited about isn’t it?