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US: Just say no to pot tax Daniel Taras Daily Camera Sunday 03 Nov 2013 State Proposition AA quantifies those taxes and is on the ballot this November. It imposes a 15 percent excise on every pound of pot sold by a grower to a retailer. Then, in addition to the current 2.9 percent State sales tax on cannabis, AA imposes another 10 percent tax on retail sales, with 15 percent of the total revenues going back to participating communities, including Boulder. This helps compensate for any additional costs of regulation. Prop AA is expected to pass, with support from inside the cannabis industry. But, 30 percent tax isn't enough for Boulder. They want more. A lot more. In fact, the city is trying to essentially double your tax on recreational cannabis. And Boulder Ballot Issue 2A is how they hope to get it. In addition to Prop AA revenue, 2A seeks an additional excise tax of 5 percent in 2014 and up to 10 percent thereafter on cultivation/wholesale, again taxing the transaction between the growers and the dispensaries in Boulder. So now we're at 20-25 percent and the pot hasn't even hit the shelves. Issue 2A then proposes a sales tax of 3.5 percent in 2014 and up to 10 percent thereafter, to be used for "public safety, enforcement and administrative purposes and for comprehensive substance abuse programs. . . with an emphasis on youth, with the remainder used for the General Fund." We're not sure what "Just Say No" campaign they'll use that hasn't failed for the last 30 years, but it will be interesting to see. And more interesting to see how much just goes to the General Fund. Issue 2A also pre-authorizes two tax hikes (up to 10 percent) for next year, even before any new administrative or program costs are known. You know, just in case they need more money. For programs that don't yet exist. A main tenet of Amendment 64 is that cannabis is regulated and taxed like alcohol (currently enjoying a 1 percent excise tax.) Yet the city smells new money and wants you to pay dearly for pot: $50-$75 tax on 1 ounce; $100-$125 tax on 2 ounces; $80-$100 on a $200 purchase. If alcohol was similarly taxed, your 6-pack of 3.2 beer would cost $13, your $10 bottle of wine would be $15, and your $100 bottle of booze would now cost you $150. Your $4 pint of beer would now cost $6. So much for Happy Hour. Here's some likely scenarios if 2A passes: People will drive to Denver to buy pot and pay a reasonable 3.5 percent city sales tax (and the state taxes). The hype about how much money Boulder will collect on recreational cannabis will be for naught. They'll collect none. Consumers will return to the black market which offers no income to the City but increases enforcement costs and ignores one of the main reasons people support legalization in Colorado: to generate revenue for our schools and reduce the illicit market for marijuana. Instead, the current plan all but guarantees a return to a vibrant black market. This is Drug Prohibition 101 Tourists will pay any amount of tax for the chance to buy weed legally. But if they're smart, they'll just buy it in Denver and smoke it in Boulder, leaving Boulder with enforcement costs but no revenue to cover it. And generate a tourist-based pot economy in the process, which the city is loathe to have. Most dispensaries will remain "medical" and continue to the collect the current 7.59 percent sales tax. All the preparations and regulations for "recreational" establishments, and all the plans for revenue to come, will be for naught. Boulder's citizens voted to legalize adult use of cannabis by a large margin, with an expectation that it would be taxed. But no one expected such a clear cash-grab, and to make it difficult to operate a dispensary. In fact, the City Council is discussing the prohibition of ground level dispensaries on Pearl Street so as to preserve its family-friendly, Disney-fied atmosphere (and to make anyone in a wheelchair basically unable to shop). Pot already contributes an extraordinary amount of money to the city in fees, rent, sales tax, employment and support services. In fact, there are few businesses in Colorado experiencing similar growth, and even fewer that volunteer to be taxed. But no business, and few customers, would welcome taxation rates nearing 50 percent. Boulder is addicted to your pot money, and wants you to support its habit. Don't Be Codependent. Send Issue 2A out in a puff of smoke. Daniel Taras lives in Boulder. http://www.dailycamera.com/guest-opinions/ci_24436601/just-say-no-pot-tax
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