Extras on Excise: Less of the Green for More of the Green in Colorado and California, but Alabama Lawmakers Want to Charge You for Red Lights and Blue Humor


In Colorado, today is a day of marijuana mayhem, a sativa soiree, a ganja jubilee. Or to be more precise, people buying retail marijuana in the state will not have to pay the normal excise or special sales tax rate on it for today.

And it’s all thanks to Colorado constitutional law. (Those of you who paid attention during 8th grade civics class, go ahead and feel vindicated now.)

The Colorado Taxpayer Bill of Rights (TABOR) requires voter approval to spend tax revenue if the revenue increases at a greater rate than inflation and population growth, as explained by Bloomberg BNA’s Jequetta Byrd. Additionally, because state spending this year has exceeded the benchmark set when voters approved legalization and taxation of retail marijuana, the tax rate must be set to zero.

H.B. 15-1367, which Gov. John Hickenlooper (D) signed into law on June 4, requires the state to lower the excise and special sales tax rate to 0 percent for Sept. 16 (today) in order to meet the TABOR rules. Voters will decide on Nov. 3 whether the state can spend the revenue or whether it will be refunded to taxpayers, per H.B. 15-1367.

Normally, the excise tax rate on retail marijuana is 15 percent, and the special state marijuana retail sales tax is 10 percent.

But before you run out to stock up on Sinister Minister and Purple Kush, please note that the regular state sales tax (2.9 percent) and applicable local sales tax rates will remain the same. Also, the excise and special sales tax rates return to normal tomorrow—this is a one-day excise tax holiday.

Over in California, the legislature has approved three bills that would implement state-level regulations for medical and have dropped tax issues at the same time. As originally reported by Bloomberg BNA’s Laura Mahoney, state lawmakers recently removed a tax proposal from the bills which would have imposed an excise tax on marijuana leaves, flowers and plants. 

The legislation, A.B. 243, A.B. 266 and S.B. 643 would require a state licensing regime and create the Bureau of Medical Marijuana Regulation.  

The bills cleared the legislative process on Sept. 11 and now await the governor’s signature.

And just to prove that taxes touch every aspect of life, Alabama legislators are considering a tax on porn. 

You can stop giggling now.

According to Rep. Jack D. Williams’ H.B 17, a 40 percent excise tax would be imposed on gross receipts from the sale or rental of “sexually-oriented materials” and admission charges to “sexually-explicit businesses.” The bill also provides for a 10 percent local excise tax. 

Oh, the lengths lawmakers must go to mitigate budget crises!

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Should Colorado taxpayers vote for a state-wide refund, or should the state use the excess revenue received from marijuana sales?

For more information about state tax issues, sign up for a free trial of Bloomberg BNA Premier State Tax Library.