Craig City Council tables additional tax on marijuana sales to allow time for business sector growth
During its Jan. 14 meeting, Craig City Council opted to hold off on levying an additional tax on recreational marijuana sales within the city, with a unanimous vote during the meeting to indefinitely table the action.
As part of Measures 2A, 2B, and 2C — all of which passed during the November 2019 election — voters approved the option of a 4% variable tax on marijuana sales.
“When we have retail marijuana revenues in the city, there will already be a city sales tax on those transactions,” City Attorney Sherman Romney said. “There’s a city sales tax, a state sales tax, and a county sales tax. We get a portion of the county and all of our city tax, so we’re going to see revenues.”
The passage of the ordinance, originally drafted and put on the ballot in October, allows the governing body to add an extra tax onto what is already present, the objective of which was intended to go toward funding for Moffat County Libraries and Museum of Northwest Colorado.
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Since then, however, the funding needs have shifted. Moffat County began transfer of ownership for the museum to the city in December — therefore becoming part of the city budget — while in October the Board of County Commissioners reinstated previously cut funding to the library for the 2020 budget.
Councilors raised the question of the prospect of temporarily refraining from imposing the additional tax until recreational marijuana sales get going.
“I think I would be in favor, just for this year, until we kind of get it up and running and see what the sales look like, I would be OK with no additional tax,” said Councilor Andrea Camp. “I feel like we don’t know what we don’t know.”
Councilor Chris Nichols stated that remaining competitive with nearby communities that already have allowed recreational marijuana is key to catching up with them financially.
“If we’re not competitive, we lose that economic development aspect,” he said. “I’d be in favor of at least starting out with no additional sales tax.”
Councilors Ryan Hess and Steven Mazucca added that the additional sales tax is something that could be better determined in the coming year after seeing sales numbers and how taxes could benefit the city.
The original measure’s language included funding for the library and museum for a stretch of five years, a timeframe which will begin once council determines the sales tax issue and would not have kicked in until the next full year, 2021.
Councilor Paul James was unable to attend the recent meeting, though he was among the most vehement opponents to extra taxes for marijuana after spending many years before his April election to council to get the sales question before voters.
Following the November election, James re-stated his case about recreational sales providing a needed economic boost.
“I just hope everyone involved sees prosperity in their future,” James said following the election. “…It’s good for locals and I hope it’s good for the people who decide to invest in Craig.”
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