Attorney General releases formal opinion on taxation issues surrounding medical marijuana

DENVER — Colorado Attorney General John Suthers issued a formal opinion today addressing questions from the Governor’s Office concerning the taxation of medical marijuana. 

“Colorado law is clear: Medical marijuana, in most instances, should be subject to state and local sales taxes,” Suthers said. “This formal opinion should help clear up many of the uncertainties surrounding the taxation of medical marijuana. Many other questions surrounding medical marijuana and Amendment 20 to the Colorado Constitution will have to be resolved by the courts or the Colorado Legislature.”

The formal opinion, available at www.coloradoattorneygeneral.gov/ag_opinions/2009, addresses: 

  • Is medical marijuana “tangible personal property” subject to the state sales tax under the Colorado tax code, section 39-26-104(1)(a), C.R.S.?
  • Do transactions involving medical marijuana constitute “sales of drugs dispensed in accordance with a prescription” such that they would qualify for tax exemption under section 39-26-717(1)(a), C.R.S.?
  • Do medical marijuana transactions qualify for the agricultural tax exemptions under section 39-26-716, C.R.S.?
  • Does the form of marijuana sold or purchased alter the tax treatment of the transaction?
  • Regardless of the legality of the activity, are individuals and enterprises that engage in the sale of medical marijuana pursuant to Amendment 20 required to obtain a license and otherwise comply with the requirements of section 39-26-103, C.R.S.?
  • If such transactions are taxable, whose obligation is it to collect and remit any sales tax due for the purchase or sale of medical marijuana?

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