REALLY? Colorado pot activists want to avoid paying taxes

After the passage of Amendment 64, Colorado voters were promised that newly-levied marijuana taxes would fund schools and education.

That is, if we tax the sales of the product, which some activists are now fighting.


SOURCE: Katy Steinmetz, Time Magazine

A lawyer representing various marijuana activists in Colorado has filed a lawsuit against the state’s governor and the mayor of Denver, claiming that residents buying or selling pot should not have to pay taxes, because that amounts to self-incrimination in the eyes of the federal government.

Attorney Robert Corry argues that the Fifth Amendment should prohibit the collection of such taxes, which include a 15% excise tax and 10% retail tax, because that creates a record of violating federal law–which still treats pot as an illegal substance, despite the fact that Colorado and Washington voters opted to legalize weed in 2012.

The case, filed in Denver District Court, could end up forcing the state and federal governments to address a discrepancy that has been left largely unresolved. The medical marijuana industry has struggled with legal issues raised by federal and state taxes for decades, and related cases are pending in federal tax court. There is for example a case currently pending in federal tax court, filed by a medical marijuana dispensary in Sacramento, Calif., arguing that dispensaries should be treated just like other small businesses when it comes to paying federal income taxes.

Read more from Time.