From Darkness To Light

14 Jul 2016

Marijuana sales tax collections now exceeding those of liquor stores for City of Durango coffers

Posted by Adam Howell

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Marking a first for the City of Durango since Colorado legalized marijuana in 2012, the City is seeing its sales tax collections from medical and retail marijuana collectively and consistently exceeding the collections of liquor stores every month since April of this year.

Sales tax collections from the month of June for recreational retail marijuana alone was $53,358 dollars, only $2,588 dollars less than sales tax collections from liquor stores for the same month. Retail and medical marijuana sales tax collections combined, however, were $64,966 dollars in June, a $9,020 dollar advantage for City coffers over the $55,946 dollar income produced by liquor store sales taxes.

Retail and medical marijuana sales tax collections represent 3.71% of Durango’s total sales tax collections among 19 different categories of industries that are operating in the city, according to the data from June of 2016. In contrast, liquor store sales tax collections made up a similar portion of the total as those of marijuana sales, representing 3.19% of total sales tax collections.

If City of Durango sales tax revenues included the 15% payback distribution from the State’s 10% special retail marijuana sales tax, its revenues from marijuana collectively would put the industry among the top ten sales tax producers for the City.

This tax collection benchmark begins a year after Durango’s City Manager Ron LeBlanc’s unsuccessful attempt to force a ballot question to city voters, which would ask them to approve an additional 5% sales tax on recreational retail marijuana to help pay for a new police station, along with other city facilities that he said needed to be replaced. City Council rejected the proposal, citing the need for more creative ways to boost the City’s budget.

Durango’s increase in sales tax revenue from marijuana comes at a time when overall city sales tax collections reported in June had slipped by nearly $43,000 dollars since the same month in 2015. Since May of 2016, the City of Durango’s total sales tax collections have fallen behind its collections from the same months in the previous year of 2015, according to data compiled by the City of Durango Finance Department in a report published on July 13, 2016.

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