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Marijuana, alcohol revenue would square up

By Joe Hanel Herald staff writer

Editor’s note: Now through the Nov. 5 election, The Durango Herald is examining common claims made in ballot campaigns.

Campaign: Proposition AA, marijuana taxes.

Claim: Proposed taxes on marijuana are unfair compared with alcohol taxes.

Who is saying it: The anti-AA campaign.

Colorado’s alcohol taxes are indeed lower than proposed marijuana taxes.

The state levies an excise tax of 8 cents per gallon of beer, 7.33 cents for a liter of wine, and 60.26 cents for a liter of hard liquor. Sales taxes and a federal excise tax also apply.

Under Proposition AA, the wholesale excise tax on marijuana would be 15 percent, and a special retail sales tax of up to 10 percent (and possibly up to 15 percent) also would apply. So would state and local sales taxes.

The state excise tax on a $10 six pack of beer is 4.5 cents, which is paid by the store and possibly built into the price the store charges its customers, according to the state Department of Revenue. The state also charges 29 cents in sales taxes on a $10 six-pack.

A customer buying $10 worth of marijuana would pay an extra $1.29 in state sales taxes. The store also would have to pay an excise tax if it buys marijuana from a grow house.

The Legislature’s budget staff estimates that the marijuana sales tax will bring in a nearly identical amount to the alcohol excise tax – about $40 million.

In addition, the marijuana excise tax is projected to bring in $27 million, but under the terms of Amendment 64, all of that money will go to school construction.

So while marijuana users will pay a higher tax rate than alcohol drinkers, the revenue that the state collects is about equal for both of the intoxicants.

But marijuana stores will face closer scrutiny by state regulators. The state’s liquor and cigarette enforcement division is budgeted for 26.5 full-time employees. The marijuana enforcement division, once it is fully funded, will have about twice that number – 55.2 full-time employees.


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