In case you haven’t heard already, Colorado has been making a killing off of legal marijuana. The substance — which we’ve come to know by many names like reefer, pot, bud, herb, and gonja just to name a few — has brought in millions for the Rocky Mountain state. Colorado’s marijuana tax revenue data was just released for the month of September.
Looking at this tax data, it appears as though the trend-setting state didn’t sell as much retail marijuana as it did during the month prior. But, in spite of the sales slowdown, the state is still earning enough cash from marijuana to have its citizens profit. Under the Taxpayer Bill of Rights (TABOR), Colorado citizens may even receive a ‘refund’ because marijuana revenues were higher than anticipated.
September’s taxes and revenue
During September, Colorado brought in $2.94 million from sales taxes on recreational marijuana alone. Considering a 10% tax rate, this means sales during the month of September were just under $30 million, which is a cool $3 million less than during the month of August when the state brought in $3.31 million in recreational marijuana sales tax revenue.
On top of this cash, Colorado is still earning huge tax dollars from medical marijuana sales taxes (at 2.9%) which have brought the state over $900,000 during the month of September alone. It also earns money from the additional 2.9% tax it imposes on retail pot, and the 15% excise tax that’s imposed on suppliers, manufacturers, etc.
What is TABOR and is it unique to Colorado?
The TABOR is designed to be a kind of like a system of checks and balances. In Colorado, the TABOR limits the amount of revenue growth to the sum of the state’s population growth plus any increase in the rate of inflation. This means that if the population were to grow by 2% and inflation were to grow by 2%, available state revenue can increase by no more than 4%, unless voters approve an increase.
According to the Colorado Department of Revenue, “Under TABOR, state and local governments cannot raise tax rates without voter approval and cannot spend revenues collected under existing tax rates if revenues grow faster than the rate of inflation and population growth, without voter approval.”
Other states have brought similar TABOR legislation to the table in the past, but Colorado is the only state that actually has such a policy in action.