Marijuana: Boulder's proposed 26 percent pot tax up for public discussion tonight
As we told you last month, Boulder City Council is considering adding a 26 percent tax on retail marijuana sales in the city -- in addition to state taxes.
The measure has gained steam since then, and tonight the city wants to hear from the general public. As it stands now, Boulder is proposing collecting up to a 10 percent special sales tax on recreational cannabis on top of the 6.31 general sales tax the city already plans to collect. All of that is in addition to the 10 percent sales tax for consumers and 15 percent excise tax on producers and sellers proposed at the state level. Boulder officials say they are also considering a 15 percent excise tax at the county level as well.
For those keeping score: that would be a proposed total tax of over 56.31 percent on pot in Boulder. Put another way, for every $1 of pot sold in Boulder County, Colorado governments would collect another $.56 in one way or another. According to the report, a 10 percent sales tax would pull in about $2.4 million each year for the city.
According to the proposal, up to 50 percent of the sales tax would help "cover the indirect costs to the city of marijuana use and allow the city to provide comprehensive substance abuse programs to mitigate the negative effects of abuse of marijuana and other intoxicating substances." All that, even though the city has yet to identify the "social impacts of legalized recreational marijuana," according to the same report. Basically, they are asking for a lot of money to cover problems they can't even predict.
The proposal doesn't technically set the high rates in Boulder; it merely caps them at 10 and 15 percent, respectively. The specifics would be left up to Boulder City Council at a later date -- though if those councilmembers are anything like state officials, they'll ask for the entire thing all at once.
By comparison, Boulder has no special taxes on alcohol. The city can't even enact one under state law. Instead, booze is considered part of the general retail sales tax, with a rate of 3.41 percent. So the tax you pay at the liquor store is the same tax you'll pay on everything from toys and games to hardware and sporting goods. At restaurants, alcohol is subject to the food service tax of .15 percent in addition to the 3.41 percent sales tax. But that's the same tax rate you'd pay for a Coke.
The state does collect a special excise tax on liquor, though it is based on volume: $.08 for every gallon of beer, $.0733 for every gallon of wine and $.6026 for every liter of liquor sold. That's equal to about 8.6 percent on a $12, 1.75 liter bottle of gin. A $60 keg of beer bought from Great Divide would come out to about .66 percent.
Other cities, like Breckenridge and Denver, have proposed a 5 percent sales tax on recreational cannabis sales -- a rate that activists and lobbyists say is more reasonable.
"We're going to need to see a rate at the 5 percent range," industry consultant Shawn Coleman told Michael Roberts back in June. "Or the result is Boulder businesses either remain medical facilities or leave the city. That would leave Boulder adult consumers with only the black market in Boulder, which is what we were trying to get away from with the passage of Amendment 64."
Boulder City Council originally had the discussion set for a committee meeting last night, but decided to move it to the full council meeting for discussion at 6 p.m. tonight at the Boulder Municipal Building, 1777 Broadway. For more information, visit BoulderColorado.gov.
More from our Colorado Cannabis Time Capsule archive: "Cannabis Time Capsule: Tripping on THC in New York City in 1893."