Ritchie King checks in on pot taxes in Colorado:
One of the bills (pdf), passed on Wednesday, lays out the tax rates: a 15% excise tax on wholesale pot and a 10% special state sales tax, in addition to the standard sales tax of 2.9%. The taxes will take effect at the beginning of next year, when licensed retail stores first start selling the drug (pending approval of the bill by the governor and the state’s citizens, which are both expected). These rates will put pot in a tax realm that is somewhere in between a case of beer and a pack of cigarettes.
The big picture:
[Researchers at Colorado State] estimate that next year, 642,772 Coloradans (about 13%) will buy an average of 3.53 ounces apiece, making for a total tax revenue of $94.4 million. Though that amounts to almost a one percent increase in total state revenue, some, including the study’s authors, have expressed concern that the money raised won’t be enough to cover the cost of enforcing new marijuana laws, such as legal driving limits. But they don’t take into account the money that will be saved by not prosecuting and incarcerating the many marijuana users who were breaking the law prior to legalization but aren’t anymore. The Colorado Center on Law and Policy estimates those savings (pdf) to be $12 million per year.