Eagle mulls retail marijuana options
August 24, 2013
EAGLE — Members of the Eagle Town Board will gather briefly Monday in the interest of preserving options and on Tuesday to thoroughly hash out the issue of whether the community will be presented with a retail marijuana sales tax question this November.
According to Eagle Town Manager Jon Stavney, a brief meeting is planned Monday so the town board can approve an intergovernmental agreement with Eagle County to participate in the coordinated election planned this November. That vote has to happen to meet a statutory deadline and preserve the town’s options regarding a November vote. Then, on Tuesday, Town Board members will debate whether or not to proceed with a retail marijuana tax issue this fall as well as what type of tax the town would impose.
“Staff is really not making a recommendation on that (the sales tax issue),” Stavney said. “In the past, the Town Board has said if we are going to allow retail marijuana … we need to look at a sales tax on it.”
Like communities throughout the state, Eagle has until the end of the year to make a decision regarding whether or not to allow retail marijuana businesses. Last November, Colorado voters passed Amendment 64, which legalizes marijuana as a recreational drug for people 21 years and older, provided they use it in private and possess not more than one ounce of the drug. Additionally in 2012, Eagle residents passed a ballot question to approve operation of the town’s sole medical marijuana operation, the Sweet Leaf Pioneer.
As part of the Amendment 64 enactment, the state has made provisions that municipalities can go to their voters seeking additional sales tax on marijuana purchases. These taxes would be tacked on top of existing sales tax amounts. The city of Denver is contemplating a ballot question that would seek an additional 3.5 percent tax on marijuana and would allow for the imposition of up to 15 percent sales tax.
Eagle could present a sales tax question similar to Denver’s, or the community could present one of two other types of questions. One would be a flat transaction fee similar to the town’s existing $4 per room, per night lodging occupation tax. The argument in favor of a flat fee is that the town has successfully defended the legality of the hotel fee, all the way to the Colorado Supreme Court, so there is case law to support an occupation tax. The argument against a flat fee is that it could be disproportionately high on smaller purchases in a retail marijuana model.
A third option would be to impose an operating fee — similar to a business license fee — that would be paid by the retail establishment.
“Money generated from any of these options would be earmarked for police training and associated law enforcement costs in the Eagle budget,” Stavney said.
If the Town Board approves the agreement Monday, that doesn’t necessarily mean an election happening this November. “They can choose to sit on it for a while and do it during the municipal election in April or even a year from now,” Stavney said.
But if the board does decide to move forward, then another special meeting is likely. Tuesday’s discussion will center on the type of tax the Town Board prefers and town attorney Ed Sands will then take that intent and turn it into official ballot language. Then, the Town Board has until Sept. 6 to approve a specific ballot question.