The Oak Creek Town Board on Thursday night voted against putting a question on the ballot that would have asked residents if recreational pot sales should be taxed.
Putting the question on the ballot would have cost the town $3,000, and several town board members expressed concerns about the tax deterring someone from opening a business that would sell marijuana for recreational use. The town currently has not approved any recreational marijuana businesses.
The tax being proposed was different than taxes approved by voters in some other Colorado communities.
The town of Breckenridge, for example, has a 5 percent tax in place that is expected to generate $500,000 during its first year. Breckenridge is a home-ruled municipality, while Oak Creek is ruled by state statute and not able to impose a percentage tax.
Oak Creek could impose an occupation tax, which would impose a flat rate per transaction. The proposed ballot language was for a tax of up to $10 per transaction, but the town board would have determined the exact amount if the tax was approved by voters. It was estimated that a $10 tax per transaction with one recreational store in town could generate upward of $100,000 annually for the town.
"I think it makes sense to put it on the ballot and let our citizens decide," town board member Chuck Wisecup said.
Wisecup and Kelly McElfish were the two council members who voted in favor of putting the question on the ballot. The other five members opposed it.
"It's not my vision of capitalism," town board member Bernard Gagne said. "It's not the way it should work."
Before voting, the town board heard from Stagecoach resident Frank Haughton, who will be seeking approval to grow marijuana in a new building at 208 South Sharp St.
Haughton said he also would like to open a retail operation in the building.
"This tax is going to crush it," Haughton said. "If you did it as a fee once a year, it might make more sense for us."
Mayor Nikki Knoebel said she was against raising the annual licensing fee of $5,910 that was set by the town a year ago for marijuana cultivation, infused products and recreational retail business operators. The fee helps cover the cost of policing the town's marijuana laws.
While the town will not be collecting the flat tax if a recreational shop opens up in Oak Creek, the town still stands to collect 3 percent of sales in sales taxes.
Tax question never posed to Steamboat Springs voters
Steamboat Springs residents also have never been asked whether they want an additional tax placed on recreational marijuana sales.
"I'm not aware of any of us ever broaching the subject," City Council President Bart Kounovsky said Thursday. "Right now, I feel the city sales tax is appropriate."
Council member Scott Ford said the thought of another tax made his head hurt. He said he would not support it unless a case could be made for how the money needed to be used.
"Just because you can, doesn't mean you should," Ford said.
To reach Matt Stensland, call 970-871-4247, email mstensland@SteamboatToday.com or follow him on Twitter @SBTStensland