TaxAdministrationTaking Stock: Accounting goes to pot

Taking Stock: Accounting goes to pot

An accounting error in Colorado's 2014 total tax collections automatically triggered the suspension of the majority of taxes on recreational cannabis

Taking Stock: Accounting goes to pot

STONERS, fans of the Grateful Dead and other assorted devotees of the Chronic were delighted for the recreational marijuana retailers of Colorado this week as they geared up for a one-day moratorium on a 25% tax on pot.

An accounting error in 2014’s total tax collections automatically triggered the suspension of the majority of taxes on recreational cannabis, Sky News reports.

The 24-hour pot holiday meant fans of the herb didn’t have to cough up a 10% sales tax, while the state is also suspending a 15% excise tax on marijuana farmers.

Retailers enjoyed bumper crowds yesterday (Wednesday) and have been giving various deals to entice shoppers before taxes reverted to normal on Thursday.

The fiscal break was revealed when Colorado released its figures for the tax year which ended in June.

Records show that marijuana tax collections rolled up to $70m (£45m). This was almost double what the state amassed from alcohol excise which could only pour $42m (£27m) into Colorado’s tax tanks.

Recreational marijuana attracts a higher tax rate in Colorado – the first state in the US to allow the sale of pot for recreational use in January 2014 – while the alcohol figures did not include a state-wide 2.9% sales tax.

Washington state, Alaska, Oregon and Washington DC have all now legalised recreational cannabis.

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