Colorado Collects $6.5 Million In Taxes On Marijuana Sales

Banking, finance, and taxes

Published: August 9, 2014 9:12 am

Colorado collected $6.5 million in taxes and fees from marijuana in July, according to the Colorado Department of Revenue. The sum may not approach that of the fees many states collect for gambling, but could be enough for other states which are considering marijuana legalization.

Colorado reported that for July, taxes, licenses, and fees paid for marijuana sales were $6.52 million. On a purely tax basis, medical marijuana fees totaled $836,000 compared to $700,00o for recreational sales. The retail marijuana sales tax (at 10%) brought in another $2.47 million. The excise tax added $969,000. If the numbers increase sharply in the months ahead, the entire fees and taxes collected by Colorado might top $200 million. At that sum, the laws which legalized marijuana would be a boon for the state’s treasury.

The debate in state legislatures across the country about marijuana legalization is divided generally into two parts. The first is whether it is moral to make it legal to use a substance which has been illegal for decades. The second is whether taxes on legal marijuana could begin to approach the yield from state lotteries and gambling. At one point, each of these was considered enough of a vice that the idea of legalizing them was abhorrent to many legislators. Those qualms have become less over time, or the attraction of tax revenue has affected their views.

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States have plenty of reasons to seek new sources of income. Even with the end of the recession, sales and property taxes have not rebounded entirely in some states. Pension liabilities run into the tens of billions of dollars in some states. And there is no path to solve this pension problem. Taxes on “vices” generally are matched to pension deficits.

States have many other long term financial problems which run from infrastructure repair to inadequate K through 12 education resources. $6.5 million may seem to be a small amount for a state until it is compared to financial problem which states cannot solve

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