Marijuana as a potential tax bonanza has Colorado lawmakers wrestling with a question both sides say they don’t know how to answer: How much will people pay for legal weed?
The state House advanced a taxing measure Monday to levy a pot tax in excess of 25 percent, a reduction from the 30 percent rate lawmakers considered last week.
The proposal sparked a lively floor debate over the proper tax rate for a drug that’s never been taxed before. Democrats argued that voters want high pot taxes, and that consumers will gladly pay a premium for the assurances that would come from a regulated and legal drug supply.
“We need to responsibly tax it,” said the measure’s sponsor, Rep. Jonathan Singer, D-Longmont.
He predicted Colorado voters would happily sign off on marijuana taxes. Colorado law requires voters to approve new taxes.
Republicans argued against the taxes, though. They pointed out that Colorado voters have a history of rejecting tax hikes, even for popular public programs, and that the public’s desire for a marijuana windfall may not materialize unless the tax rate is lower.
“Taxation of marijuana is right, just, and proper. But we have make sure this passes,” said House Republican Leader Mark Waller.
Other Republicans noted that marijuana taxes would be in addition to hefty licensing and application fees to enter the business. The result, they feared, could be the retention of a black market for pot. The measure approved by voters last year allows not just retail pot sales, but also home marijuana growing, raising the specter of plentiful homegrown weed to compete with the taxed marijuana.
“The consensus has always been that the industry needs to pay for itself … but whether we like it or not, there’s already an entrenched black market in place,” said Rep. Dan Nordberg, R-Colorado Springs.
The tax debate came after a largely party-line vote on a separate marijuana bill to regulate how the newly legal drug can be grown, packaged and sold.
Among other things, that bill requires potency labels, serving-size limits on edible pot and purchasing limits for out-of-state buyers. The regulation bill also revives a marijuana blood-limit standard for drivers, a proposal that has failed four times in the Senate. The House vote Monday to revive the DUI standard renews the battle.
A third marijuana bill awaits action in the Senate. That measure includes less controversial pot regulations, such as a new crime of providing marijuana to people under 21.
Washington and Colorado, the only two states that have legalized pot for recreational use, are still awaiting federal response to the votes. Marijuana remains illegal under federal law, even for medical use.
Marijuana regulation bill: http://bit.ly/11RIeiY
Marijuana tax bill: http://bit.ly/12ekKlF
Source: Associated Press (Wire)
Author: Kristen Wyatt, Associated Press
Published: April 29, 2013
Copyright: 2013 The Associated Press