To some it may seem no surprise that Colorado has significantly surpassed the projected tax revenue from legal marijuana sales so far. To date Colorado has brought in over $150 million in tax revenue on recreational marijuana alone – it’s gotten to the point where they have covered the cost of legalization and have moved on to using the money for schools.
Though now the state is faced with a problem – they’ve generated too much tax revenue and now they have to give some back. Yes, you heard that right, they have made so much money that they have to give some of it back to the citizens.
Colorado adopted a policy back in 1992 known as the Taxpayer’s Bill of Rights. This bill of rights basically says that when the state has collected a certain amount of tax revenue they cannot collect anymore and they must refund the tax payers.
With a 28% sales tax on recreational marijuana it is no wonder they were able to surpass their projected revenue so soon. Though it may have seemed like a slow start to the year that took a turn quickly and has jumped up almost 100% since then.
The total tax revenue collected in the first 5 months of 2014 was $25 million – it was already at $44 million in the first 5 months of 2015. Looking at this, they will be sending a refund to taxpayers every year if the percentage stays at the high 28% it has been at since the plant was legalized.
The real problem lies in whether or not the taxpayers will see their money come back to them at all. While the law states that the excess funds should be returned to the taxpayers, it is obvious many politicians would be far less interested in seeing it happen.
As far as the consumers are concerned, feelings seem to be slightly mixed on the idea. While some consumers would be happy to continue to pay the tax – as long as the additional funds were going to benefit schools, others think the tax is unfairly high and should be returned to the taxpayers in some form or another.
In November there will be a vote to decide where the excess funds will be distributed, whether it be to the taxpayers or to schools and other worthwhile projects.
After this year, perhaps we will see the tax on recreational marijuana go down in Colorado – after all the state government doubtfully want to give money back year after year. As for this year, until November, people will just have to speculate on whether or not the money will go back to the taxpayers or if it will continue to go towards funding schools.