Forget Income Tax Refunds. Coloradans Might Get a Marijuana Refund! (Paid Out in Money, Not Pot)

Getty – Kevork Djansezian

Americans who are getting a jump on their income taxes may already be looking forward to receiving (and spending) their refund checks. But for those who live in Colorado, another type of rebate may be making its way toward their bank accounts: a “reefer refund”!

According to state law, Denver may be forced to return some of the money collected in recreational marijuana taxes during the first, full year of legal sales. Residents and tourists racked up $50 million in taxation revenue for Colorado in 2012.

Image credit: Flickr Creative Commons

Image credit: Flickr Creative Commons

The state constitution contains an amendment referred to as a Taxpayers’ Bill of Rights (TABOR), which was approved by voters almost a quarter-century ago. In addition to requiring all new taxes to receive the go-ahead from Colorado voters, TABOR also compels the state to issue refunds to taxpayers whenever it takes in too much money in revenues. The definition of “too much” is set by a complex formula that has been established under the law.

Since TABOR was passed, residents of the Rocky Mountain State have received these types of refunds six times, with total amounts ranging from about $40 million to over $1 billion.