Fate of marijuana sales tax money is hazy

The fate of money generated by retail marijuana tax is uncertain because of a stipulation in Colorado’s Tax Payer’s Bill of Rights.

Recreational marijuana generated $44 million in tax revenue during its first year. When voters passed Amendment 64, the promise was that that money would go toward education and drug prevention.

Tim Hoover with Colorado Fiscal Institute explained a rule under the Taxpayer Bill of Rights, or TABOR, the state could have to give all the money generated from the pot tax back.

Before voters approve of a new tax, the state must provide estimates of how much money the new tax would generate in one year and how much money the state would have without the tax.

Hoover said economists were off on the numbers in their second estimation, the economy did better than expected and therefore, the state brought in more money in taxes.

“Even though they were off just a little bit, they still have to refund all the money from the new tax that was passed, in this case the marijuana tax, for the first year, that’s just the way TABOR works,” said Hoover.

The state has several options. State lawmakers can ask voters to allow them to keep the money. The state could also refund each taxpayer or cut taxes on retail marijuana for a year.

Happy hour at Marisol Therapeutics was bustling Tuesday afternoon.

Manager Tracy Elias said the question of pot and taxes is complicated.

“If we don’t charge taxes, it doesn’t allow us to put money back into the community which is what we promised in the first place,” said Elias.

At the same time, if the state had to cut taxes on pot sales for one year, Elias said it would boost business.

“In some way shape or form it is going to go back into the community,” said Elias.

There is a bill right now under consideration in the state Legislature that would ask voters to allow the state to keep the money. Hoover said right now it has bi-partisan support.