Colorado Issues Guidance on Taxability of Marijuana

Friday, January 10th, 2014


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.

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Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

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