Marijuana taxes prove sticking point in Colorado

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DENVER (AP) — Marijuana as a potential tax bonanza has Colorado lawmakers wrestling with a question both sides say they don’t know how to answer: How much will people pay for legal weed?

The state House advanced a taxing measure Monday to levy a pot tax in excess of 25 percent, down from the 30 percent rate lawmakers considered last week.

The proposal sparked a lively floor debate over the proper tax rate for a drug that’s never been taxed before. Democrats argued that voters want high pot taxes, and that consumers will gladly pay a premium for the assurances that would come from a regulated and legal drug supply.

“We need to responsibly tax it,” said the measure’s sponsor, Rep. Jonathan Singer, D-Longmont.

He predicted Colorado voters would happily sign off on marijuana taxes. Colorado law requires voters to approve new taxes.

Republicans argued against the taxes, though. They pointed out that Colorado voters have a history of rejecting tax hikes, even for popular public programs, and that the public’s desire for a marijuana windfall may not materialize unless the tax rate is lower.

“Taxation of marijuana is right, just and proper. But we have make sure this passes,” said House Republican Leader Mark Waller.

Other Republicans noted that marijuana taxes would be in addition to hefty licensing and application fees to enter the business. The result, they feared, could be the retention of a black market for pot.

The measure approved by voters last year allows not just retail pot sales, but also home marijuana growing, raising the specter of plentiful homegrown weed to compete with the taxed marijuana.

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