Pubdate: Fri, 01 Mar 2013
Source: Macomb Daily, The (MI)
Copyright: 2013 Associated Press
Contact:  http://www.macombdaily.com/
Details: http://www.mapinc.org/media/2253
Author: Kristen Wyatt, Associated Press
Page: 6

COLORADO TASK FORCE PONDERS HOW TO TAX LEGAL POT

DENVER (AP) - Pot smokers in Colorado were the biggest winners in the 
vote that legalized the drug. Now state regulators are working out 
the details of exactly how to tax it, so the benefits are shared 
statewide in the form of increased revenue.

A state panel set up to regulate marijuana in Colorado agreed 
Thursday to recommend the highest tax contemplated by voters last 
year - a 15 percent excise tax, with the profits going to school construction.

The tax question is far from settled, though.

Colorado lawmakers could set a lower tax, or they could add sales 
taxes beyond the current statewide 2.9 percent. Legislators could 
even create a special new "marijuana tax" for consumers, plus a 
series of required licensing fees for growers and sellers. Besides 
schools, the taxes must fund marijuana safety enforcement and drug 
education measures.

Any option would have to go back to voters for final approval.

Marijuana proponents and critics agree that taxes should be hefty. 
But if levies are too high, legal pot could be so expensive that 
people continue buying it underground.

"If this doesn't work and taxes are so high the black market still 
dominates, then what was the point?" asked Mike Elliott of Colorado's 
Medical Marijuana Industry Group.

Others argued that marijuana taxes should be sky high so that pot 
smokers pay for any damage to public health and safety. Task members 
got a visit Thursday from Gov. John Hickenlooper, a former brewpub 
owner who told the pot group that taxes and regulations in the booze 
business are exhaustive, too. Hickenlooper opposed marijuana 
legalization and has since warned of costs to society including teen 
drug abuse.

"I'm not saying the sky is falling and it's the end of the world. But 
most people expect ... there will be some negative consequences" from 
legal pot, Hickenlooper said.

Fiscal analysts have no idea where to begin predicting how much 
tokers could produce in taxes. The unknowns include how many people 
are buying pot now and what they're paying, how many people will 
start smoking marijuana now that it's legal, and whether prices will 
drop once commercial sales begin. If the federal government blocks 
commercial pot sales, the marijuana tax windfall would be zero.

Colorado regulators reviewed mixed tax projections and seemed 
exasperated at even trying to guess what the market will be.

"It's all a mythical figure. We're talking about an industry that 
doesn't exist today," said Tamra Ward, head of the group Colorado Connect.
- ---
MAP posted-by: Jay Bergstrom