Marijuana: Denver City Council recommends lower sales tax out of fear higher one would fail
Denver City Council has marijuana on the brain, though sadly not in the way we would like to see.
Council spent most of yesterday dealing with marijuana issues, starting with a three-hour committee meeting focused largely on zoning and ending with a lengthy council meeting spent debating marijuana tax proposals. A majority eventually opted for a lower sales tax rate than originally envisioned, in part because of fears voters would reject a higher one.
Specifically, the council preliminarily agreed by a 7-6 margin to move forward with a 3.5 percent special sales tax on marijuana that could be raised to as much as 15 percent down the line. Denver Mayor Michael Hancock had initially urged council to set the tax rate at 5 percent, but a report from Denver Auditor Dennis Gallagher projected that a 5 percent rate would likely fail if put to voters.
A final vote on the rate will take place at the council's next meeting, Monday, August 6, and the public will be given an opportunity for comment before members weigh in. If approved, the tax proposal will go before Denver voters in November along with the proposed 25 percent combined excise and sales tax agreed upon at the state level.
Since the bill was touted to regulate marijuana "like alcohol," it's worth noting that Denver does not have a special alcohol tax -- and council members couldn't enact one if they wanted to, according to state law.
A group photo of Denver City Council.
Booze is taxed the same as all other general retail sales tax items. Instead, the state collects an alcohol excise tax based on volume: $.08 for every gallon of beer, $.0733 for every gallon of wine and $.6026 for every liter of liquor. Even so, the rates are nowhere near as high as those envisioned for cannabis. On an average, mid-priced liter of gin, you'd be paying about 8.6 percent in tax. A keg of beer would come out to be about .66 percent.
Among the main issues raised in the committee meetings was zoning for recreational marijuana shops and whether or not public hearings would be required before a medical marijuana dispensary could switch over to a recreational shop.
Local marijuana attorney Warren Edson notes that council decided not to mandate what are known as "needs and desires" hearings before a recreational marijuana dispensary could open. Such hearings are required for establishments that sell alcohol and require people to testify or sign their names to a petition that says they want that establishment in their neighborhood, because they;d like to have access to alcohol.
Such hearings for marijuana were shot down, Edson says, after several council members pointed out so long as marijuana remains federally illegal, few citizens would want to testify on record that they want or need the herb.
Continue for more about the Denver City Council and marijuana regulations.