City of Denver Additional Marijuana Sales Tax, Question 2A (November 2013)

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Voting on Marijuana
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A City of Denver Additional Marijuana Sales Tax, Question 2A ballot question was on the November 5, 2013, election ballot for voters in the city of Denver in Denver County, which is in Colorado. It was approved.

This measure authorized a city sales tax on retail marijuana and related products. The tax increase was set at $4.48 million per year. The original sales tax was set at a rate of 3.5% but the ballot question allows the city to increase or decrease the rate without further voter approval as long as the rate stays below 15%. Revenue was designed to be used to fund regulations and enforcement of regulations for now legal marijuana use.[1]

Question 2A and Proposition AA were approved and added to the general state sales tax of 2.9% and local sales tax of 6%. This results in recreational marijuana users in the city seeing a total sales tax rate of at least 22.4% percent plus an excise tax of 15%. And, with increase provisions built into the state and local measures, these tax rates could increase to a sales tax of 38.9% and an excise tax of 15%.

Election results

Queston 2A
ResultVotesPercentage
Approveda Yes 90,401 68.54%
No41,50131.46%
These results are from the Question 2A Denver County elections office.

Background

In 2012, Colorado voters approved Amendment 64, which legalized marijuana throughout the state of Colorado. Although pot use still remained a federal crime, state and local agencies have been faced this year with the regulation and enforcement of regulations involved with recreational use of cannabis. Amendment 64 included clauses that referred to sales taxes on marijuana, which would pay for regulation and go towards education. On the state-wide level Proposition AA, which was approved by voters on the November 5, 2013 ballot, proposed a 15% excise tax and a 10% sales tax, with the option of an increase to 15%. Read details about this measure on Ballotpedia's Proposition AA article.

Text of measure

The question on the ballot:

SHALL CITY TAXES BE INCREASED BY $4.48 MILLION ANNUALLY IN THE FIRST FULL FISCAL YEAR AND BY SUCH AMOUNTS AS ARE RAISED ANNUALLY THEREAFTER BY IMPOSING AN ADDITIONAL SALES TAX OF 3.5% ON THE SALE OF RETAIL MARIJUANA AND RETAIL MARIJUANA PRODUCTS, WITH THE TAX REVENUES BEING USED TO FUND THE ENFORCEMENT OF REGULATIONS ON THE RETAIL MARIJUANA INDUSTRY, OTHER COSTS RELATED TO ENFORCEMENT OF MARIJUANA LAWS, EDUCATION AND PUBLIC HEALTH PROGRAMS ASSOCIATED WITH MARIJUANA CONSUMPTION INCLUDING PREVENTION OF UNDERAGE CONSUMPTION, AND OTHER CITY EXPENSES, WITH THE RATE OF THE TAX BEING ALLOWED TO BE INCREASED OR DECREASED WITHOUT FURTHER VOTER APPROVAL SO LONG AS THE RATE OF TAXATION DOES NOT EXCEED 15%, AND WITH THE RESULTING TAX REVENUE BEING ALLOWED TO BE COLLECTED AND SPENT NOTWITHSTANDING ANY LIMITATIONS PROVIDED BY LAW?[1][2]

Support

Supporters

  • The Green Party[3]

Arguments in favor

The League of Women Voters published a voter guide with arguments in favor and opposed to Question 2A. The arguments in support of 2A are listed below:

1. Most citizens, including some in the marijuana industry, want this revenue to implement and enforce the necessary regulations to keep marijuana use safe.

2. Only marijuana users themselves will pay the tax and therefore cover the cost of the industry.

3. Medical marijuana will still be taxed at the present low rate of 3.62%, our regular sales tax for goods in Denver.[4][2]

Opposition

Opponents

Arguments against

The League of Women Voters published a voter guide with arguments in favor and opposed to Question 2A. The arguments in support of 2A are listed below:

1. Taxes being proposed are excessive. Retail marijuana sales will be subject to existing state and city sales taxes automatically. If the state Proposition AA passes, an additional sales tax will be added.

2. Adding a city tax could cause consumers to turn to the black market to purchase marijuana.

3. Letting City Council raise this tax in the future to as much as 15% without a vote of the people is giving too much power to the Council.[4][2]

Potential tax rates

Below are the minimum and maximum sales tax rates made possible by the approval of both Proposition AA and Question 2A. These are in addition to the 15% excise tax in Proposition AA.

Minimum sales tax

10% - Proposition AA
3.5% - Question 2A
2.9% - State tax
6.0% - City tax
22.4% - Total

Maximum sales tax

15% - Proposition AA
15% - Question 2A
2.9% - State tax
6.0% - City tax
38.9% - Total

Path to the ballot

See also: Laws governing local ballot measures in Colorado

Question 2A was referred to the ballot by the city council.[4]

Related measures

Statewide

See also: Marijuana on the ballot

Approveda Colorado Proposition AA, Taxes on the Sale of Marijuana (2013)
Approveda Colorado Marijuana Legalization Initiative, Amendment 64 (2012)

Local

See also: Local marijuana tax on the ballot

Approveda City of Denver Additional Marijuana Sales Tax, Question 2A (November 2013)
Approveda Town of Eagle Marijuana Occupation Tax, Question 2F (November 2013)
Approveda Ballot Issue 2E: City of Littleton Marijuana Sales Tax
Approveda Ballot Issue 1B: Pueblo County Marijuana Sales Tax
Approveda Ballot Issue 2A: Town of Frisco Marijuana Excise Tax
Approveda Ballot Issue 2F: Town of Silverthorne Marijuana Excise Tax
Approveda Ballot Issue 2C: Town of Breckenridge Marijuana Excise Tax
Approveda Town of Carbondale Marijuana Sales Tax Ballot Measure (November 2013)
Approveda Measure 2C: Town of Fraser Marijuana Sales Tax
Approveda Question 2A: City of Manitou Springs Marijuana Sales Tax
Approveda Question 2G: Town of Red Cliff Marijuana Sales Tax


See also

External links

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Additional reading

References