Tuesday, July 6, 2010

Voters may get say on pot tax


Pueblo voters may get to voice their opinions on medical marijuana in November, including whether to levy a 4.3 percent sales tax on the drug and its related paraphernalia.

That would be on top of the current city sales tax of 3.5 percent. And on top of the state's 2.9 percent sales tax. And Pueblo County's 1 percent tax. Those taxes already total 7.4 percent if you're adding them up.

"So we're talking about a total sales tax of nearly 12 percent on medical marijuana?" asked Tom Sexton, the owner of MediMar Ministries, a medical marijuana center that is trying to get licensed in Pueblo. "It seems the city's attitude is to make it as difficult as possible for people who have a legal right to use medical marijuana to obtain any. And the only thing that will accomplish is keep the business underground."

In two weeks, City Council will consider a proposed ballot measure that would impose the 4.3 percent tax on medical pot and other products sold with it. That rate of tax was picked by city staff because the city already charges a 4.3 percent surtax on every hotel and motel room in the city — called a lodging tax.

"No one knows what it would actually cost the city to license and regulate medical marijuana centers, so we are proposing a similar amount to the lodging tax as a starting point," City Attorney Tom Florczak said last week.

Council hasn't really discussed the sales-tax issue yet, although there is broad sentiment among the seven members that if the city is going to license and regulate those businesses, the medical pot centers should pay additional sales tax. Part of the reason is that council expects the businesses to require more attention from police.

Council President Larry Atencio, who favors licensing and regulating the businesses said all indications are the marijuana centers have plenty of patients or customers.

"Voters have said people have a right to use medical marijuana for certain health conditions," Atencio said. "That's fine, but I'm also willing to tax the heck out of them. I'm all in favor of sin taxes, so a 4.3 percent tax sounds fine to me."

Councilwoman Judy Weaver doesn't want any medical marijuana centers in Pueblo. She wants council to support a resolution that would put that fundamental question on the November ballot. Thus far, a majority of council appears to be favoring licensing, regulating and taxing the medical pot industry instead.

But if centers are established in the city, Weaver wants to tax them, too.

"I'd hope we'd do the research on what other cities are charging and what their experience is," she said, noting that voters in the Western Slope town of Fruita approved a 5 percent tax on medical pot sales.

Sexton has been trying to get formal city approval to operate his center since the summer of 2009. He obtained a sales tax license and then council passed an emergency moratorium last autumn on licensing marijuana centers. That ban has been extended twice and now runs through July 27 of this year. And the Legislature just finished approving a new state law that will not start providing state licenses until July 2011.

Sexton said that state and local governments are setting up hurdles for medical marijuana providers faster than operators can address them.

"What I'm hearing is that the state is going to be charging something like $30,000 for a state license," Sexton said with some resignation. "And now the city wants to tack on more sales tax. They must want to force all medical marijuana providers to operate underground. What about the people who need this for their medical conditions? Why are they being punished with these higher taxes?"

Council intends to have a public hearing on the proposed ballot question at its next regular meeting on June 28.


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