Taxes on Marijuana
This information is from the Colorado Department of Revenue Web Site
As a consumer of RETAIL marijuana, how much tax will I be charged on my purchase?
When purchasing retail marijuana, the purchase is subject to the 2.9% state sales tax plus any local sales taxes and an additional 10% state marijuana sales tax. A complete list of state, city, county and special district tax rates is available through Revenue Online.The rates are also available in the publication Colorado Sales/Use Tax Rates (DR 1002).
As a consumer of MEDICAL marijuana, how much tax will I be charged on my purchase?
Medical marijuana is subject to the 2.9% state sales tax and any local sales taxes. A complete list of state, city, county, and special district tax rates is available through Revenue Online. The rates are also available in the publication Colorado Sales/Use Tax Rates (DR 1002).
What type of tax am I paying on retail marijuana? Excise or Sales? Both?
The excise tax on retail marijuana is imposed on the first transfer or sale from the cultivator to the retail marijuana store. The retail marijuana cultivator is liable for the excise tax. The price of the retail marijuana at the store will include the excise tax, similar to liquor or tobacco. The sales tax is imposed on the sale from a retail marijuana store to the consumer. The marijuana store is liable for remitting the sales taxes it collects from the consumer.
Retail Marijuana Tax Rates:
- State Sales and Local Tax Rates: The state sales tax rate on all tangible personal property, including marijuana, is 2.9%. Local tax rates can be found in Revenue Online. Look for View Local Sales Tax Rates under Other Services. (These taxes are charged on the final consumer purchase price.)
- Marijuana Sales Tax Rate: Consumers will also pay a 10% sales tax on all retail sales of retail marijuana and marijuana-infused products in the state. (Charged on the final consumer purchase price.)
- Medical Marijuana Tax Rates: Medical marijuana is not subject to the 15% retail marijuana state excise tax (included in the price of the product). Consumers will pay the 2.9% state sales tax plus any local sales taxes on the final consumer purchase.
- State Marijuana Excise Tax Rate: Retail marijuana is subject to a 15% excise tax on the average market rate of retail marijuana. The excise tax is based on the average market rate for flower, trim and immature plants.
- 1 pound of retail marijuana flower with an average market rate of $1,876 will result in excise tax of $281.40 ($,1876 x 0.15)
- 1 pound of retail marijuana trim with an average market rate of $296 will result in $44.40 excise tax
- 1 retail marijuana immature plant with an average market rate of $9 will result in $1.35 excise tax.
Mary wants to buy one ounce of retail marijuana flower for $200.00. Mary will not see the excise tax on retail marijuana flower because it is included in the purchase price.
Mary will pay state sales taxes of $25.80 for the retail marijuana flower. ($200 multiplied by the sales tax rate of 12.9%). This is the state sales tax of 2.9% on all tangible personal property (which includes marijuana) AND the state retail marijuana sales tax of 10%. Mary will also pay local sales taxes. The amount of local sales taxes will depend on the location of the store where the purchase is made.