In September 2015, Colorado announced its first tax free holiday. This concept was a holiday similar to most states’ equivalent sales tax holiday. On the sales tax side, the holiday usually coinciding with the back to school calendar. Specifically, shoppers are incentivized to buy clothes and other school supplies if they shop during the sales tax free period. So why not have the same idea for marijuana? That’s what Colorado was thinking when it announced its first marijuana tax holiday.
Recently, votes have been cast and Colorado taxpayer decided not to allow a marijuana tax refund for themselves. In a follow-up to the “Colorado Announces Marijuana Tax Free Holiday” blog, Colorado voters approved Proposition BB, Retain Revenue in Excess of Blue Book Estimate, allowing Colorado to retain $66.1 million in tax revenue collected from the first year of marijuana sales. Colorado taxpayers effectively denied themselves of a tax refund by an overwhelming 70 percent of voters in favor of the proposition.
Colorado legislators introduced HB 15-1367 which allowed Colorado voters a chance to keep the marijuana tax revenue of $66.1 million or refund it to the taxpayers, at least it seemed so on its face. On November 3, the vote passed for a good logical reason. The surplus of the marijuana revenue will be allocated towards the general improvements of public schools and Colorado’s state programs. If taxpayers voted against the proposition, the refunds would likely only go back into the hands of marijuana cultivators. Instead, Colorado residents will now see their tax dollars put to use in their public school system.
With the approval of Proposition BB, the marijuana surplus will be allocated as follows:
- $40 million will be spent on school construction through the Building Excellent Schools Today (BEST) program; and
- $12 million will be spent to fund the following state programs:
- $2.5 million to marijuana education;
- $2 million to school bullying prevention;
- $2 million to grants for programs to prevent students from dropping out of school;
- $2 million to youth mentoring services;
- $1 million to poison control centers;
- $1 million to local government marijuana impact grants;
- $500,000 to substance abuse screening, intervention, and referral;
- $500,000 to substance abuse treatment;
- $300,000 to the Future Farmers of America and 4-H programs at the Colorado State Fair;
- $200,000 to training peace officers to recognize impaired drivers; and
- As final numbers for the 2014-15 fiscal year are still coming in, the remainder of the refund has not been allocated yet.
In the end, the Colorado taxpayers voted for the one result that they would actually see their tax dollars put to good use. With $40 million allocated towards public school construction and $12 million spend to better society, how could one argue the approval of Proposition BB?
Colorado Constitution http://tornado.state.co.us/gov_dir/leg_dir/olls/constitution.htm#ARTICLE_X_Section_20
About the author: Mr. Donnini is the president and founder of Tobacco Tax Refunds, Inc. He is also multi-state sales and use tax attorney and an associate in the law firm Moffa, Gainor, & Sutton, PA, based in Fort Lauderdale, Florida. Mr. Donnini has extensive knowledge handling wholesale tax controversy and refunds.
In his law practice Mr. Donnini's primary practice is multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of federal tax controversy, federal estate planning, Florida probate, and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Donnini obtained his LL.M. in Taxation at NYU. Mr. Donnini is licensed to practice law in Florida. If you have any questions please do not hesitate to contact him via email [email protected] or phone at 954-639-4496.