Remember all the fuss about marijuana legalization in Colorado? It now seems that residents could be smiling all the way to the bank if the state refunds them about $30 million in pot taxes.
Colorado was entering into something it had never tried before when it decided to legalize pot. More importantly, the state was severely strapped for cash and was trying to raise extra funds for its schools — and the state coffers, as well.
According to Colorado’s constitution, the state has a limit as to how much taxpayer money it can accept before giving some back to its residents. The Mountain State raised $50 million in revenue during the first year of sales of legalized marijuana.
As good as this all sounds, some are surprised that the extra pot revenue is not actually going to the schools, as was decided in 2012, when Colorado legalized marijuana. Many believe the money should go to education, while others are happy to get anything back, as they believe taxes are high enough already.
Legal weed has collided with the tax limitation movement because a 1992 voter-approved constitutional amendment called the Taxpayers’ Bill of Rights requires all new taxes to go before voters, the Huffington Post reports.
This amendment also established that Colorado must pay back taxpayers when it collects more than what is allowed, according to a formula, which is based on population growth and inflation. Interestingly, the matter of what to do with the extra revenue is creating an unusual agreement between Democrats and Republicans, who say there is no reason to give the money back to the people.
If the lawmakers can’t decide to give the money back, the situation will have to be decided by yet another vote, in which residents of Colorado will decided where the extra pot revenue should go.
“This is a little bit of a different animal. There’s a struggle on this one,” said Sen. Kevin Grantham, a Republican member of the budget committee.
Since the state’s economy has improved more than expected, with other tax collections increasing at a faster pace, Colorado must give the money back to its people. There are no final numbers yet. However, the belief is that the marijuana additional revenue stands at around $30 million, which translates to $7.63 per adult.
Lawmakers also have to decide whether the pot tax refund is to go to all residents or just to those who purchased marijuana.
“This is what the voters want, and if we’re going to have (pot), and the constitution says it’s legal, we damn well better tax it,” Democratic state Sen. Pat Steadman said.
In general, the legislators are confident the refund procedure won’t matter in the end, because Colorado voters will approve marijuana taxes for a third time, if needed.
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