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AN ORDINANCE REPEALING AND REENACTING ARTICLE X OF CHAPTER 20 OF THE COMMERCE CITY REVISED MUNICIPAL CODE REGARDING THE VOTER-APPROVED EXCISE TAX ON THE WHOLESALE TRANSFER OF MARIJUANA AND MARIJUANA PRODUCTS TO SUPPORT PUBLIC SAFETY.
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Summary and Background Information: Proposed Ordinance 2209 repeals and reenacts a section of the City’s revised municipal code imposing the 5% tax on wholesale transfers of marijuana and marijuana products approved by voters on November 7, 2017. Ballot Issue 2C, approved by a vote of 53.14% Yes (3,610) to 46.86% No (3,184), authorized a tax of 5% on all such wholesale transfers (adjustable up or down in the future, but not more than 10%). Revenues of the tax are required to be dedicated for public safety uses.
As implemented currently by Ordinance 2156, the wholesale excise tax is in addition to the City’s 4.5% sales and use tax. The wholesale excise tax would not overlap with the City’s 7% retail sales tax applicable to marijuana and marijuana products. The ballot issue approved by voters authorizes a 5% tax on every wholesale transfer of marijuana and marijuana products (including transfers by the same business between licenses). The tax as currently implemented is assessed at the average market rate (for marijuana) or the greater of the price or cash value (for marijuana products). Marijuana paraphernalia is excluded from the excise tax on marijuana products. The ordinance also excludes “industrial hemp” from the definition of marijuana subject to both taxes. Currently, the City avoids double taxation by limiting the tax to the first wholesale transfer of marijuana and marijuana products.
The City Council directed staff to prepare Ordinance 2209 limiting the wholesale excise tax to transfers of unprocessed retail marijuana from cultivators located within the city to achieve consistency with other jurisdictions, to remain competitive, to increase fairness, and to improve administration of the tax. The retail...
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