Quick and Dirty
County snuffs marijuana excise tax

County snuffs marijuana tax plans

Local members of the marijuana industry can now exhale. La Plata County shelved plans for an excise tax on marijuana grows in the county on Tuesday.

“It seems premature to pursue an excise tax at this point,” County Commissioner Julie Westendorff said during the Board of County Commissioners’ regular meeting Tuesday.

She, along with her two fellow commissioners, were in agreement on scrapping the excise tax after listening to testimony from several residents and dispensary owners. Among the biggest concerns was an unfair burden on the fledgling industry. Currently in Colorado, it is taxed at a rate of 20 percent between state and local sales taxes not to mention a nearly 70 percent federal income tax rate.

“The high tax rate puts us in a difficult position to survive. It’s pretty excessive,” Carolynn Raisch, speaking on behalf of Durango Organics, told commissioners Tuesday.

County officials initially proposed the excise tax idea last spring to help meet an estimated $6 million budget shortfall over the next few years. The tax would apply to wholesale purchases of marijuana grown and sold within the county. Commissioners held a public hearing last Thurs., July 20, to allow residents to weigh in on the possible tax, which would have required voter approval. The deadline to reserve space for the measure on November’s ballot is Fri., July 28.

In addition to concerns over unfairly burdening the industry, commissioners also expressed concern over what they say are numerous illegal grows throughout the county, which would not be taxable. “Maybe we need to bring them under control first,” Commissioner Brad Blake said.

Commissioners also expressed uncertainty over how much the excise tax, which could be up to five percent, would generate. “I’m not sure we even know what the revenue would look like,” said Blake. “First we were saying millions, then halves of millions, and now it’s significantly less.”

In addition, it’s possible the excise tax could drive jobs out of La Plata County and lead to a decline in pot revenues from the County’s existing 2 percent sales tax.

“We don’t want to be trading jobs for jobs,” Blake said. “I’m very concerned about revenues for the county.”

In the end, commissioners decided perhaps their time would be better spent trying to partner with the industry in making changes on the federal level, such as allowing marijuana businesses to open bank accounts or deduct expenses from their federal income taxes.

“It’s incumbent upon your local elected officials, and at the state level, to be in touch with our federal decision-makers about the reforms that are necessary,” Commissioner Gwen Lachelt said. “We need this industry to be able to bank. Our community needs that; your employees deserve that.”

In closing, she also countered criticism that government entities are not appreciative of the marijuana industry and what it has brought to the economy. “We have constant conversations among this board about the need to diversify the economy in La Plata County,” she said. “This marijuana industry has been a key ingredient in helping us to diversify.”

The City of Durango is considering its own special marijuana sales tax. There will be a public hearing on the pro- posed measure at 6:30 p.m. Tues., Aug. 1, at 949 E. 2nd Ave.