Posted: November 18, 2009
The Colorado Attorney General has recently ruled that sales tax must be collected by the vendor on sales of medical marijuana dispensed in accordance with Article XVIII, Section 14 of the Colorado Constitution.
The law requires that all businesses selling medical marijuana be licensed through the Colorado Department of Revenue and collect and remit sales tax to the department on all taxable sales. If a business fails to collect sales tax from customers, they will be liable to pay the tax that should have been collected.
Any businesses selling medical marijuana that do not have a Colorado sales tax license should immediately file and submit the CR 0100, Colorado Business Registration Form, to set up a sales tax account and receive a license. Please note there is a fee and a sales tax deposit required with the license application. See the CR 0100 form for details. This form can be taken to any Taxpayer Service Division service center where the account could be set up immediately and a temporary license issued. The department will mail the final paper license in 4 to 6 weeks.
After the sales tax account is set up, the business should begin collecting sales tax. Tax rates can be found in the publication DR 1002, Colorado Sales Tax Rates or by using our Local Tax Rates System. Additional forms and information is available on our Web site under Sales Tax.
Please maintain timely filings to avoid penalty and interest charges. To report other dispensaries that are not currently collecting tax a secure e-mail can be sent through our Web site under Contact Us. All matters are kept confidential.
The formal Attorney General Opinion is available online.