Carbondale approves pot-taxing question for ballot
Post Independent Staff
CARBONDALE — Voters here will decide on Nov. 5 whether the town government should impose a total tax rate of 10 percent on recreational marijuana businesses that do business here — 5 percent each on retail sales and on wholesale transactions, following action by the Board of Trustees on Tuesday.
The move to tax marijuana businesses is part of the town’s response to the passage last year of Amendment 64, which made it legal for anyone over 21 years of age to possess, use, grow or sell marijuana.
The measure, put to state voters as a popular initiative, passed statewide by a margin of 55 percent to 44 percent, and in Carbondale by a margin of about 70 percent.
The trustees once had thought of taxing recreational marijuana retail sales by 10 percent, and wholesale transactions by as much as 40 percent. But at recent meetings the trustees had concluded it would be inappropriate for the town to make money off such sales, and that a simplified tax amount might stand a better chance of passage by the voters.
Rather, the tax is meant to offset the cost of regulating the business in town, including police training, legal fees to write ordinances, and other matters.
The new taxes, if approved by the voters, would be applied over and above the town’s current sales tax rate of 3.5 percent. The town currently does not tax medical marijuana sales, although the trustees on Tuesday discussed enacting a medical-marijuana tax in the future.
According to estimates by town staff, the pot shops are projected to generate more than $3.2 million in sales, and a 5 percent tax on those sales would mean $161,000 to $282,000 in the town’s coffers.
The excise tax proceeds, according to the town, are expected to come to between $64,000 and $112,000.
Current sales tax revenues in the town are approximately $22,500.
Trustee Allyn Harvey asked why, if the town is taxing recreational marijuana businesses, it is not taxing the medical marijuana dispensaries as well.
He suggested that recreational pot wholesalers in town, trying to avoid the excise tax, might simply declare themselves to be shipping to medical marijuana centers instead of recreational pot shops.
Town Manager Jay Harrington replied that medical marijuana facilities are closely monitored by the state regarding compliance with state regulations, including a provision that medical marijuana purveyors must grow 70 percent of their own product.
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