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Accounting, Tax, IRS & Marijuana

Retail Marijuana Sales Tax Changes Fact Sheet

From the Colorado Department of Revenue's Office:

Recent statutory changes resulting from Senate Bill 17-267 have led to changes in state sales taxes collected at the point of sale for retail marijuana and retail marijuana products.

● Beginning on July 1, 2017, the Retail Marijuana Sales Tax rate levied on retail marijuana and
retail marijuana products at the point of sale increases from 10% to 15%.

● This legislation also exempts retail marijuana and retail marijuana products sold on or after July 1, 2017, from the State Sales Tax rate on tangible personal property of 2.9%.


● Please consult the publication DR 1002: Colorado Sales/Use Tax Rates, available on the Taxation Division’s website at Colorado.gov/Tax, to determine if any additional tax exemptions apply based on the business location.
   ○ This exemption also extends to the following special districts: Regional Transportation
District (RTD), Science and Cultural Facilities District (CD), Regional Transportation
Authority (RTA), Multi-jurisdictional Housing Authority (MHA), Metropolitan District Tax
(MDT) and Health Services District (HSD).
   ○ Local taxes were unaffected by this legislation and may still apply.


● “Retail Marijuana” and “Retail Marijuana Products” are defined in statute and do not include
other types of tangible personal property that a retail marijuana business may offer for sale, such as apparel, glassware or rolling papers. Any sale of these other types of items are still subject to the 2.9% State Sales Tax.


● Retail marijuana businesses will still be required to file the DR 0100: Colorado Retail Sales Tax
Return. Taxpayers will report their overall Gross Sales and Services on line 1 (including the amount of retail marijuana and retail marijuana product sales) and, beginning with the July 2017 filing period, claim the state exemption by subtracting sales of Retail Marijuana and Retail Marijuana Product on line 10 in Part B – Exemptions Schedule of the return, which carries over to the main return, line 3b, column 1.
  ○ Retail marijuana businesses located within a special district that also allows this
exemption should follow these instructions to claim the exemption in columns 2 or 3,
too.


● To learn more, please refer to publication FYI Sales 93: Sales Tax on Marijuana available on the Taxation Division’s website, Colorado.gov/Tax.