Colorado residents were thrilled as it was announced that they will be having a marijuana tax-free holiday.
One of the main sources of Colorado's funds is taken from taxes both from medical and recreational marijuana sales. As per High Times' report, "An accounting error in Colorado is paying off marijuana consumers last Wednesday." It was when an unusual tax state law prompted the stated to suspend most taxes on recreational pot.
The pot tax holiday would only be implemented for a day. And this simply meant that Colorado won't collect 10 % sales taxes on pot. Colorado would also be suspending a 15 % excise tax on the growers. A total of 25% tax exception would be implemented.
The tax holiday occurred when Colorado underestimated overall state tax collectors last year. As per the state constitution, the accounting error triggered an automatic suspension of any new taxes.
As per BBC the state law requires an automatic suspension on any new taxes the moment an accounting error would occur. Due to the pot tax-free day, retailers are expecting high volume of customer as the prices would drop for a day.
The average saving that will be made on the day of the pot tax exemption would be for a $200 ounce of marijuana will be about $20, and a regular 2.9% sales tax will still apply as per Fox31 Denver's report. The pot tax holiday is estimated to cost Colorado up to $4m in revenue. It however benefits retailers who have customers lining up even before the store opens.
The owner of the Colorado Harvest Co. chain of Marijuana dispensaries, Tim Cullen happily stated that he saved a substantial amount of money because of the pot tax holiday stating:
"I probably saved $45,000 before lunch"
Colorado is the first state in the United States to legalize marijuana after voters approved the legalization way back 2012.
