March 19, 2014 Leave a comment

Colorado Governor John Hickenlooper says, The marijuana industry was a great supporter of our very stiff tax rates generally they ve been supportive of our pretty stiff regulation, Colorado marijuana tax rates relatively aren t very stiff at all Whatever assumptions you use, those taxes add up to less than 20 percent of the after tax retail price. That’s less than Colorado taxes cigarettes. European cigarette taxes almost always account for over 75 percent of the retail price often, over 85 percent.

How can a 15 percent wholesale tax, a 10 percent retail tax, and a 2.9 percent sales raise less than 20 percent of the final price? Because the base of the wholesale tax is so small the wholesale price is very small compared to the retail price. The Governor s estimates (more ambitious than the Legislature’s when it comes to taxes) call for the first full fiscal year of recreational marijuana sales to bring in $125,008,337 in total from the three taxes, and $612,785,960 in pre tax price. The wholesale tax is estimated at $45,958,948. The estimated retail tax of $61,278,598 and the 2.9 percent sales tax of $17,770,793 add to that pre tax price of $612,785,960 for a total after tax price of $691,835,351. Total taxes, $125,008,337, are just over 20 percent of the $612,785,960 pre tax price, and just over 18 percent of the $691,835,351 after tax price. In percentage terms, that’s less than the combined federal ($1.01) and Colorado ($0.84) excise taxes per pack of cigarettes, which sell there, after tax, for about $6 a pack.

To see what very stiff tax rates look like, look at Europe s rates on cigarettes. Official chart linked here and copied at European tobacco taxes 2014 Table column 8 on page 6 shows total taxes as a percentage of WAP weighted average price. In the United Kingdom, taxes are 87.5 percent of that retail price. The government gets 87.5 percent the entire private sector supply chain, from farm to retail store, gets 12.5 percent. And the U.K. is not an outlier Greece gets 87.45 percent Poland gets 85.01 percent. Of the 28 countries in the Union, only little Luxembourg has a rate below 75 percent. Those countries don’t burden the marijuana trade with anything like our Federal Tax Code section 280E, but the Governor’s point was about rates.

Looking at it another way, in the U.K., the state gets 87.5/12.5 of what the private sector gets, or 700 percent. That s stiff.

Europe has stiff cigarette tax rates. Make taxes too stiff and you allow bootlegging problems. That’s a good reason not to have stiff taxes at first, especially at first. And stiff tax rates would simply not allow recreational marijuana to compete with Colorado’s tax free medical marijuana. But for recreational marijuana, Colorado is not yet dealing with “very stiff tax rates.”

Share this

  • Email
  • Digg
  • Google
  • Pinterest
  • Facebook
  • Print
  • Reddit
  • Tumblr
  • LinkedIn
  • StumbleUpon
  • Twitter


Leave a Reply Cancel reply Enter your comment here…

Fill in your details below or click an icon to log in

Email (required) (Address never made public) Name (required) Website

You are commenting using your account. ( Log Out / Change )

You are commenting using your Twitter account. ( Log Out / Change )

You are commenting using your Facebook account. ( Log Out / Change )

You are commenting using your Google account. ( Log Out / Change )


Connecting to %s

Notify me of follow up comments via email.

Cigarettes in usa and eastern europe

Tighter controls for tobacco products approved – rt news

Users Reading this article are also interested in &bull Touring Eastern Europe, by Keith Barrett &bull Cigarettes Advertising, by seikoo &bull Electronic Cigarettes, by Find me a gift Top Searches on Web Development &bull End Of The Internet&bull Update Internet Explorer
About The Author, cigbuynow

Amateur article writer on different topics. Like surfing on internet. This time told about Also paid attention on other different sites

Web Development &bull Image Formats GIF & JPEG & BMP &bull Web Access & Accessing the Web &bull Web Traffic & Maintaining your Website &bull Domain & Hosting & Web Design Website Checklist &bull Adword & Adsense Make Money with Adsense &bull Color Psychology & Colors Psychology Psychology of Color &bull Website Usability & Web Site Usability Websites Usability &bull Website Designer & Web Site Designer Web Site Designer &bull Web Hosting To Switch or to Stay? &bull FAQ Page & FAQ Pages &bull Funtion & Functions Website Funtion & Website Functions &bull Webmaster & Failure of Dot Com &bull Web Accessbility & Web Usability &bull Free Software & Free Softwares &bull The Need to Be Online &bull Its The Eyeballs Stupid &bull Ebay Store vs. Ecommerce Website &bull Tips to Avoid Online Fraudulent Orders &bull The Importance of the “Human Touch” in the Virtual Marketplace &bull Virtual Assistants And The Power Of E Productivity
More on Web Development