Monday, December 2, 2013

Colorado PROP AA Retail Marijuana Tax Information Update


Below see a statement from the Department of Revenue, which will administer all the new taxes under Prop AA for retail marijuana. I participated in the stakeholders group advising DOR on these issues. I argued, as did others, that the DOR proposal to tax the initial transfer of marijuana from medical to recreational was not allowed by the law. After initially vowing to tax this transfer, as shown below, DOR has changed their position. I'm proud of my work on the stakeholders group to stop this bad decision. Let me know if you have any questions. Thanks,

Sean T. McAllister, Esq.
McAllister Law Office, P.C.
36 Steele St., Suite 200
Denver, CO 80206
(Ph) 720-722-0048
(Fax) 720-542-8391
Offices in Denver and Summit County

From: "Vecchiarelli - DOR, John" <>
To: "Sean McAllister" <>, 
Cc: "Phillip Horwitz - DOR" <>
Sent: Wednesday, November 27, 2013 4:17:29 PM
Subject: Excise Tax

First of all I want to thank those of you who participated in and provided input to our stakeholder meetings.  Your participation provided valuable insights.  I know that most of you are probably anxious to know the Division's position regarding the imposition of the excise tax on the one time transfer of Medical Marijuana inventory into the Retail Marijuana environment.  Below you will find a written statement which will serve as direction to my staff who will draft the proposed regulation which will be disseminated at the December 17th 2013 hearing. If you have any questions please let me know.

Based on input from our stakeholders, the Tax Division of the Department of Revenue conducted additional research and consulted with our counsel at the Attorney General's Office.  The Division believes that the initial one-time transfer of Medical Marijuana and Medical Marijuana-Infused Product to the Retail Marijuana Establishment is not subject to excise tax.

However, once the initial one-time transfer of Medical Marijuana to a Retail Marijuana Cultivation Facility occurs, that Medical Marijuana will become Retail Marijuana and the property of the Retail Marijuana Cultivation Facility.  As such, the Division believes it will be subject to applicable excise taxes upon transfer of the Retail Marijuana to either a Retail Marijuana Products Manufacturing Facility, a Retail Marijuana Store, or to another Retail Marijuana Cultivation.

Proposed rules to address excise taxes in accordance with the above will be considered and included in the proposed tax rules that will be sent to all stakeholders in advance of the Excise Tax Rule-making hearing currently scheduled for 12/17/13.