HB 17B-1001

HB 17B-1001 is a Colorado bill that corrects an issue with Senate Bill 17-267, which had inadvertently exempted retail marijuana sales from local and state taxes. This means that the special 15% tax on marijuana sales will now also be subject to additional local sales taxes by various governmental entities like transportation districts and health services districts. The bill ensures that these local entities can collect their own sales taxes on top of the state's specific marijuana tax, which was previously not happening due to a loophole. Since it has been signed into law, this change will help ensure that all applicable taxes are collected on retail marijuana sales going forward.

Official Summary

Senate Bill 17-267 exempted retail marijuana sales from the 2.9% general state sales tax and, as previously authorized by voter approval, increased the rate of the state retail marijuana sales tax, a special sales tax that is levied only on retail marijuana sales, from 10% to 15%, effective July 1, 2017. Under current state law, certain limited purpose governmental entities that either currently levy sales tax, are authorized by statute to levy sales tax but do not currently do so, or will be authorized to levy sales tax if they are established in the future as authorized by current law (affected entities) may levy sales tax only on transactions on which the state levies the general state sales tax. By exempting retail marijuana sales from the general state sales tax, effective July 1, 2017, Senate Bill 17-267 thus also inadvertently exempted such sales from both sales taxes currently levied by affected entities and sales taxes that either existing affected entities that do not currently levy sales tax or not yet established affected entities might levy in the future. Affected entities that currently levy sales tax include the regional transportation district, the scientific and cultural facilities district, 5 metropolitan districts, 5 regional transportation authorities, one health services district, and one multijurisdictional housing authority. The bill clarifies that notwithstanding the exemption of retail marijuana sales from the general state sales tax, all affected entities that levy sales tax shall tax retail marijuana sales. (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

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