Pot users, growers and sellers in Colorado are definitely rejoicing after the state declared a Tax-free Weed Day on Wednesday. The one-day pot tax holiday came after the state underestimated its overall state tax collections last year.
Colorado's Tax-Free Weed Day simply means that the state won't collect 10 percent sales tax on pot as well as the suspension of 15 percent excise tax on marijuana growers. According to ABC News, an accounting error prompted the suspension of most taxes on recreational pot. Because under the state constitution, accounting errors mean an automatic suspension of any new taxes, which is the recreational marijuana taxes approved in 2013.
The Tax-Free Weed Day is the first in history and Colorado is also the first state to generate more tax revenue from marijuana than alcohol, Daily Caller noted. Based on the figures released by the Colorado Department of Revenue, $70 million was brought from marijuana taxes compared to less than $42 million from alcohol taxes, over the course of the year.
"Marijuana taxes have been incredibly productive over the past year, so this tax holiday is a much-deserved day off," Marijuana Policy Project Director of Communications Mason Tvert said in a statement. "This will be the one day out of the year when the state won't generate significant revenue. Over the other 364 days, it will bring in tens of millions of dollars that will be reinvested in our state."
Meanwhile, after the Tax-Free Weed Day on Wednesday, the taxes revert to 25 percent on Thursday, The New York Times reported. Until then, retailers are hoping for big crowds but the state can't estimate the number of shoppers the holiday would attract.
Marijuana has completely outpaced alcohol in bringing in revenue. Pot users spend much more on the drug rather than on alcohol or tobacco. As per Marijuana Business Daily's new market research, the average amount spent on marijuana in states where the drug is legal is $1,800 per year while alcohol is only at $450 and tobacco at $315, whereas about $602 on personal care products and services, representing a major gap.
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