SB 18-259

Senate Bill 18-259, titled "Local Government Retail Marijuana Taxes," updates how local governments can tax marijuana businesses. It sets a maximum 5% tax rate based on either the average market price or contract price for transactions between related and unrelated marijuana companies. The bill also allows certain counties to continue using an older method of calculating this tax until the end of 2020 if they had voter approval before November 1, 2018. Additionally, it clarifies that transporting unprocessed marijuana isn't considered a taxable transfer. This bill has been signed into law and will affect how local governments collect taxes from marijuana businesses within their jurisdictions.

Official Summary

Section 1 of the bill: Generally requires a county or municipality that levies excise tax on the first sale or transfer of unprocessed retail marijuana by a retail marijuana cultivation facility (retail marijuana excise tax) to levy the tax at a rate of up to 5% of the average market rate (the only basis for calculation allowed under current law) of the unprocessed retail marijuana if the transaction is between affiliated retail marijuana business licensees and at a rate of up to 5% of the contract price of the unprocessed retail marijuana if the transaction is between unaffiliated retail marijuana business licensees; As a temporary exception to the new general requirement that retail marijuana excise tax on transactions between unaffiliated marijuana business licensees be calculated based on the contract price of the unprocessed retail marijuana, allows a county or municipality which, before November 1, 2018, obtained voter approval to levy only an excise tax calculated based on the average market rate of the unprocessed retail marijuana and thereafter could not obtain voter approval for an amendment to allow the excise tax to be calculated based on the contract price for the unprocessed retail marijuana to continue to collect retail marijuana excise tax on such transactions based on an average market rate calculation until December 31, 2020; and Clarifies that if a retail marijuana cultivation facility uses a retail marijuana transporter, as defined in current law, to transport unprocessed retail marijuana being sold or transferred by the retail marijuana cultivation facility to a retail marijuana product manufacturing facility, a retail marijuana store, or another retail marijuana cultivation facility, the transportation of the unprocessed retail marijuana by the retail marijuana transporter is not a transfer of unprocessed retail marijuana for the purpose of levying a county or municipal retail marijuana excise tax. Section 2 clarifies that a metropolitan district may levy only its general uniform sales tax on retail sales of marijuana and may not levy a special marijuana sales tax. Section 3 requires state retail marijuana excise tax to be calculated as 15% of the contract price when the first transfer of retail marijuana that has been harvested for sale at a retail marijuana store or extraction by a retail marijuana product manufacturing facility is between unaffiliated retail marijuana cultivation facilities. Section 4 appropriates $15,480 to the department of revenue for tax administration IT system (GenTax) support.(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.) , Read More

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