Colorado Issues Guidance on Taxability of Marijuana

Friday, January 10th, 2014

 
 
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Colorado
General

The Colorado Department of Revenue recently released guidance on the taxability of marijuana sales. On January 1, 2014, marijuana became legal in Colorado, and sales of marijuana are subject to tax.

Sales of medical marijuana and retail marijuana are subject to state sales tax. Sales of retail marijuana are subject to an additional 10% state tax. Cities may also impose special taxes on retail marijuana sales.

Taxpayers must report sales of retail marijuana on both the regular sales tax return and the Retail Marijuana Sales Tax Return. Sales of medical marijuana must be reported on the regular sales tax return.

Sales of medical marijuana are exempt from state sales tax if the patient has a registry card with a tax-exempt status notation from the Colorado Department of Public Health and Environment. A patient qualifies for this tax-exempt status if his or her income falls below certain thresholds. These patients must present their registry cards to the retailer at the time of purchase to claim this exemption. There are no exemptions for sales of retail marijuana.

http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251926413934&ssbinary=true


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