--- description: Because of an unusual tax law, Colorado is being forced to waive taxes on recreational pot for a single day. title: Why Colorado Is Waiving Taxes on Recreational Pot for a Day image: https://static.time.com/v3/assets/bltea6093859af6183b/bltff7ef932f72dcc49/698862ee428a9e5184ccf075/461673089.jpg?branch=production&width=1920&quality=75&auto=webp&crop=16:9 ---  * [Business](/section/business/) ## Business Update your preferences in [Account Settings](/account/preferences/) Close * [Pot](/tag/pot/) ## Pot Update your preferences in [Account Settings](/account/preferences/) Close # Why Colorado Is Waiving Taxes on Recreational Marijuana for One Day ## Video: Inside the World of Medical Marijuana for Kids [Watch (HLS stream): Inside the World of Medical Marijuana for Kids](https://cdn.jwplayer.com/manifests/6Ic4KUCK.m3u8) (16:16)  _Published 2014-10-21. The story of a family's illegal cross-country drive to transport marijuana oil for their epileptic 3-year-old daughter. A look inside the quasi-legal, science free world of medical marijuana for children from TIME's Red Border Films_ by [Michal Addady / Fortune](/author/fortune/) ## Michal Addady / Fortune Update your preferences in [Account Settings](/account/preferences/) Close Sep 9, 2015 9:49 PM CUT  An employee pulls marijuana out of a large canister for a customer at the LoDo Wellness Center in downtown Denver, Colorado, U.S., on Thursday, Jan. 9, 2014\. Colorado has just legalized the commercial production, sale, and recreational use of marijuana, while Washington State will begin its own pot liberalization initiative at the end of February. On Jan. 8, New York Governor Andrew Cuomo said his state would join 20 others and the District of Columbia in allowing the drug for medical purposes. Photographer: Matthew Staver/Bloomberg via Getty Images An employee pulls marijuana out of a large canister for a customer at the LoDo Wellness Center in downtown Denver, Colorado, U.S., on Thursday, Jan. 9, 2014\. Colorado has just legalized the commercial production, sale, and recreational use of marijuana, while Washington State will begin its own pot liberalization initiative at the end of February. On Jan. 8, New York Governor Andrew Cuomo said his state would join 20 others and the District of Columbia in allowing the drug for medical purposes. Photographer: Matthew Staver/Bloomberg via Getty ImagesBloomberg—Bloomberg via Getty Images by [Michal Addady / Fortune](/author/fortune/) ## Michal Addady / Fortune Update your preferences in [Account Settings](/account/preferences/) Close Sep 9, 2015 9:49 PM CUT Because of its unusual sales tax law, Colorado will have to waive taxes on recreational marijuana on Sept. 16, the [_Associated Press_ reports](http://bigstory.ap.org/article/81722baed4664d2c874b4c889589e62c/tax-quirk-forces-colorado-waive-pot-taxes-day "undefined"). Voters approved a 25% tax on recreational pot back in 2013, a year after it was legalized. Colorado law states that if overall state tax collections surpass projections, the new tax will be waived and refunded. The state estimated that recreational marijuana would bring in $70 million in taxes. It actually brought in only $58 million, but because the overall tax collection exceeded estimations, the law still applies. This one-day waiver will allow taxes to revert to zero. Despite the sales-tax holiday, marijuana won’t be completely tax free. The 25% tax on recreational marijuana will be waived, but the regular 2.9% sales tax, medical marijuana taxes, and local marijuana taxes will still apply. An ounce of mid-grade marijuana will cost $20 less than it normally would. This tax waiver could potentially cost the state between $3 million and $4 million, but it won’t affect the state’s overall revenue too much. In the first five months of 2014, marijuana tax revenues were at $25 million; that number jumped up to $44 million in the first five months of this year. The state plans to [reduce taxes on marijuana](http://fortune.com/video/2015/06/10/colorado-stoners-just-got-a-tax-break/ "undefined") to 8% by 2017. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/4028556/colorado-pot-taxes/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/4028556/colorado-pot-taxes/"},"headline":"Why Colorado Is Waiving Taxes on Recreational Marijuana for One Day","datePublished":"2015-09-09T21:49:24.000Z","dateModified":"2026-02-22T10:48:48.459Z","description":"Residents are getting a sales-tax holiday for pot","url":"https://time.com/4028556/colorado-pot-taxes/","keywords":["Pot","Colorado","Retail","revenue","pubdesk"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/bltff7ef932f72dcc49/698862ee428a9e5184ccf075/461673089.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Michal Addady / Fortune"}],"articleSection":"Business","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/bltff7ef932f72dcc49/698862ee428a9e5184ccf075/461673089.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"Pot Prices Double as Colorado Retailers Roll Out Green Carpet","caption":"Pot Prices Double as Colorado Retailers Roll Out Green Carpet","creditText":"Bloomberg—Bloomberg via Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/business/","name":"Business"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/pot/","name":"Pot"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/4028556/colorado-pot-taxes/","name":"Why Colorado Is Waiving Taxes on Recreational Marijuana for One Day"}}]},{"@context":"https://schema.org","@type":"VideoObject","name":"Inside the World of Medical Marijuana for Kids","description":"The story of a family's illegal cross-country drive to transport marijuana oil for their epileptic 3-year-old daughter. 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