DENVER — The Colorado statehouse gave final approval to a taxation plan for legal marijuana, supposedly a non-partisan issue, on a straight party-line vote.
The 37-27 vote Tuesday morning followed a long debate Monday about what the appropriate rate should be.
Lawmakers agreed to set an excise tax rate of 15 percent and a sales tax rate of 10 percent, down from the initial proposal of 15 percent, on top of the existing 2.9 percent state sales tax and other local taxes.
Under the proposal, which got initial approval from the House Monday afternoon, lawmakers would have the ability to ratchet the sales tax rate up to 15 percent if necessary in the future.
Republicans worried that the combined sin tax of close to 40 percent would be too high to keep marijuana buyers away from the black market and might not even be approved by voters, who must approve the final taxation rates that lawmakers agree to.
“To think that 40 percent won’t drive a secondary market or potentially not pass the ballot, that is another thing we need to consider,” said Rep. Brian Delgrosso, R-Loveland. “It would be the highest sin tax on the books, much higher than alcohol and cigarettes.”
The Democratic sponsor of House Bill 1318, Rep. Jonathan Singer of Longmont, argued that both sides have settled on the rates that the initial draft of the bill proposed.
“We had both law enforcement and the players in the marijuana industry come to the table and say this is a fair way to do things,” Singer told FOX31 Denver Monday.
During the debate, lawmakers acknowledged that they have no real idea of how much revenue will be generated under the proposed tax rates or what it’ll cost to put the new framework in place.
“We’re breaking new ground,” Delgrosso said. “We can’t point to other states and say this tax rate has or hasn’t worked out for them. We’re pioneering new ground; I don’t think many of us are happy we’re in this position, but we are. And we’ve got to figure it out.”
House Bill 1318 now moves to the Senate.
The companion legislation, House Bill 1317, which lays out the regulatory framework itself, passed the House Monday on a final vote of 35-29.
That bill has now been introduced in the Senate with Sen. Cheri Jahn, D-Wheat Ridge, signing on as the sponsor.