Colorado § 39-28.8-302 - Retail marijuana - excise tax levied at first transfer from retail marijuana cultivation facility - tax rate.

§ 39-28.8-302. Retail marijuana - excise tax levied at first transfer from retail marijuana cultivation facility - tax rate.

(1) (a) (I) Except as otherwise provided in subsection (1)(b) or (1)(c) of this section, there is levied and shall be collected, in addition to the sales tax imposed pursuant to part 1 of article 26 of this title 39 and part 2 of this article 28.8, a tax on the first sale or transfer of unprocessed retail marijuana by a retail marijuana cultivation facility, at a rate of fifteen percent of the average market rate of the unprocessed retail marijuana if the transaction is between affiliated retail marijuana business licensees. Except as otherwise provided in subsection (1)(b) or (1)(c) of this section, there is levied and shall be collected, in addition to the sales tax imposed pursuant to part 1 of article 26 of this title 39 and part 2 of this article 28.8, a tax on the first sale or transfer of unprocessed retail marijuana by a retail marijuana cultivation facility, at a rate of fifteen percent of the contract price for unprocessed retail marijuana if the transaction is between unaffiliated retail marijuana business licensees. Retail marijuana excise tax shall also be calculated as fifteen percent of the contract price when the first transfer of retail marijuana that has been harvested for sale at a retail marijuana store or extraction by a retail marijuana product manufacturing facility is between unaffiliated retail marijuana cultivation facilities. The tax shall be imposed at the time when the retail marijuana cultivation facility first sells or transfers unprocessed retail marijuana from the retail marijuana cultivation facility to a retail marijuana product manufacturing facility or a retail marijuana store.

(II) If, for the fiscal year 2014-15, fiscal year spending is greater than twelve billion eighty million dollars or if the revenue from retail marijuana taxes is greater than sixty-seven million dollars, then on September 16, 2015, the rate of the tax imposed under subparagraph (I) of this paragraph (a) is reduced as specified in section 20 (3)(c) of article X of the state constitution. On September 17, 2015, in accordance with paragraph (b) of this subsection (1) and the authority that the voters conferred through their approval of proposition AA at the November 2013 election, the rate is increased back to fifteen percent.

(b) The fifteen percent tax rate specified in paragraph (a) of this subsection (1) is the maximum tax rate that may be imposed pursuant to this section. At any time on or after January 1, 2014, the general assembly may, by a bill enacted by the general assembly and that becomes law:

(I) Establish a tax rate to be imposed pursuant to this subsection (1) that is lower than fifteen percent of the average market rate of unprocessed retail marijuana at the time that it is sold or transferred; or

(II) After establishing a tax rate that is lower than fifteen percent pursuant to subparagraph (I) of this paragraph (b), increase the tax rate to be imposed pursuant to this subsection (1); except that in no event shall the general assembly increase the tax rate above fifteen percent of the average market rate of unprocessed retail marijuana at the time that it is sold or transferred. Notwithstanding any other provision of law, an increase in the tax rate pursuant to this subparagraph (II) shall not require voter approval subsequent to the voter approval required pursuant to part 4 of this article.

(c) The transfer of unprocessed retail marijuana exclusively for microbial control is deemed to not be the first transfer of unprocessed retail marijuana for the purposes of this section.

(2) (a) Except as provided in subsection (2)(b) of this section, the tax imposed pursuant to subsection (1) of this section shall not be levied on the sale or transfer of unprocessed marijuana by a marijuana cultivation facility to a medical marijuana center.

(b) A transfer and change of designation of retail marijuana to medical marijuana pursuant to sections 44-10-502 (9) and 44-10-602 (13) or retail marijuana that has been extracted and is in a concentrated form to medical marijuana that has been extracted and is in a concentrated form pursuant to sections 44-10-503 (12) and 44-10- 603 (15) is not a transaction that creates a right to a refund of a retail marijuana excise tax imposed or paid prior to that transfer and change of designation.

(3) The department of revenue shall provide local governments with information regarding the tax collected pursuant to this section under a confidential shared-use agreement.

Source: L. 2013: Entire article added, (HB 13-1318), ch. 330, p. 1871, § 1, effective May 28. L. 2015: (1)(a) amended, (HB 15-1367), ch. 271, p. 1068, § 5, effective June 4. L. 2017: (1)(a)(I) amended and (3) added, (SB 17-192), ch. 299, p. 1640, § 4, effective August 9. L. 2018: (1)(a)(I) amended, (SB 18-259), ch. 406, p. 2390, § 3, effective January 1, 2019. L. 2021: (2) amended, (HB 21-1216), ch. 306, p. 1834, § 5, effective July 1, 2022. L. 2024: (1)(a)(I) amended and (1)(c) added, (SB 24-076), ch. 410, p. 2835, § 13, effective August 7.

Cross references: For the legislative declaration in HB 15-1367, see section 1 of chapter 271, Session Laws of Colorado 2015.