New Colorado Marijuana Revenue Estimate

In Colorado, the revenue estimate for marijuana excise taxes went up.  An official 2013 legislative estimate called for $67 million for the first full fiscal year, July 2014 to June 2015.  As of February 18, math shows that the Governor is officially expecting $107,237,544 from those excises.  An officially reported $117 million number, linked below, includes taxes other than excises, and excludes amounts sent to localities.

The $67 million was simply the sum of expectations for Colorado’s 15 percent wholesale tax ($27.5 million) and its 10 percent retail tax ($39.5 million).  The lower-rate retail brings in more revenue because its base is larger:  the retail price is higher than the wholesale price.  (In fact, the wholesale price base has been abandoned, and converted to a weight base:  62 cents a gram for flowers, and 10 cents a gram for trim.  But that’s another story.)

The $107,237,544 requires math.  The official report shows $45,958,948 as the proceeds from the 15 percent wholesale tax and $52,086,807 as the state’s 85 percent share of the 10 percent retail tax.  To that, we have to add a calculated $9,191,789, the 15 percent share of the retail tax that goes to localities.  So the total retail tax take, state and local, is $61,278,596.

$45,958,948

$52,086,807

$9,191,789

$107,237,544

That $107,237,544 is the number to compare to the previous $67 million number.  Both cover just marijuana excise taxes.

Now $107,237,544 is not the number that appears on the new Colorado estimate (or anywhere).  The new Colorado estimate is instead $117,847,657.  That new total adds to the estimates for the specific marijuana taxes other amounts:  $17,770,793 in ordinary (2.9 percent) sales taxes, $1,962,413 in fee receipts, and $68,696 in “Other” estimated receipts.  Omitting that calculated $9,191,789 local share of retail taxes is how the estimate gets to $117,847,657.

$17,770,793

$52,086,807

$45,958,948

$1,962,413

$68,696

$117,847,657

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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