Bonanza of money for Colorado residents & marijuana taxes

The marijuana experiment in Colorado was originally intended to raise revenue for the state and its schools, but sales have been so high that a state law may put some of the tax money directly into residents’ pockets.

A voter-approved constitutional amendment from 1992, called the Taxpayers’ Bill of Rights, requires Colorado to pay back taxpayers when the state collects more than what’s permitted by a formula based on inflation and population growth. In other words, the state constitution limits how much tax money the state can take in before it has to give some back. It also requires all new taxes to go before voters.

SEE ALSO: How do you talk to your kids about legal marijuana?

Over the years, Colorado has issued refunds six times, totaling more than $3.3 billion. This time, Colorado residents may be entitled to a cut of the $50 million in recreational pot taxes collected in the first year of legal weed, according to the Associated Press.

Final numbers aren’t ready, but the governor’s budget writers predict the pot refunds could amount to $30.5 million, or about $7.63 per adult in Colorado.

This situation is so strange that even Republicans and Democrats agree. Democrats are usually in favor of taxes going towards community improvement while Republicans usually want tax dollars returned to taxpayers. But in this case, they see no good reason to put pot taxes back into people’s pockets.

Republicans also tend to say that marijuana should pay for itself – that general taxes shouldn’t pay for things like increased drug education and better training for police officers to identify stoned drivers.

Sales of marijuana have been so high that a state law may put some of the tax money directly into residents’ pockets. (Shutterstock)

“I think it’s appropriate that we keep the money for marijuana that the voters said that we should,” said Republican Senate President Bill Cadman. His party opposes keeping other refunds based on the Taxpayers’ Bill of Rights but favors a special ballot question on pot taxes.

State officials are scrambling to figure out how to avoid returning the money to tax payers directly. It may have to be settled by asking Colorado voters, for a third time, to cast a ballot on the issue and exempt pot taxes from the refund requirement.

Marijuana users are split on the issue. Some have no problem paying taxes if they are going towards schools while others believe taxes that add 30 percent or more to the price of pot, depending on the jurisdiction, are too steep.

SEE ALSO: Marijuana education in Colorado: “Don’t let a candy bar ruin your vacation”

After legalizing marijuana in 2012, Colorado voters returned to the polls the following year and approved a 15 percent excise tax on pot for the schools and an additional 10 percent sales tax for lawmakers to spend.

Lawmakers will consider pot refunds and a separate refund to taxpayers of about $137 million after receiving final tax estimates that are due in March. They’ll have to figure out if the money would go to all taxpayers, or only those who bought pot.