The Town of Pagosa Springs has recently decided to start retaining all of the marijuana retail sales tax generated from shops located within town limits.
The topic was first brought to the Archuleta County Board of County Commissioners (BoCC) during a work session held on Oct. 8 at which County Attorney Todd Weaver explained it was discovered that there was never a formal agreement put in place determining how marijuana retail sales tax would be distributed between the town and county.
Weaver provided additional information during a work session held by the BoCC on Oct. 15 in regard to the lack of a formal agreement between the town and county.
He explained that a former county employee noticed a discrepancy with a retailer operating a storefront in the town, along with a second storefront in the county, but were paying sales tax from both locations to the town.
“They were paying all of their marijuana sales tax to the town,” Weaver said.
He explained that the town and county have been splitting all of the retail marijuana sales tax from each store located within the town or county.
“Everything was being split 50/50 between all the retail stores,” Weaver said, referring to the current agreement as “some type of ... gentleman’s handshake agreement.”
He added, “And it turns out, there was never, ever a formal agreement between the town and the county to split that 50/50.”
Commissioner Ronnie Maez commented that previous county and town employees likely assumed it as regular sales tax.
Weaver reiterated that the agreement was never formalized.
“They just agreed to do it that way, which technically should not have happened,” Weaver said.
In an email to The SUN, Weaver states, “Since there was never a formal agreement between the Town and County to split the marijuana sales tax 50/50, the Town simply decided to retain all of the MJ sales tax from the retail stores within Town limits and the County, by default, then receives the MJ sales tax from the retail stores within its jurisdiction.”
He noted that this does not require a vote for approval from the BoCC.
During the Oct. 15 work session, Weaver mentioned that, given the town’s situation in looking to repair its failing sewer systems, “they’re looking to get any revenue they can.”
Maez commented, “I don’t blame ‘em.”
Commissioner Veronica Medina mentioned that moving forward with this will have an affect on the amount of marijuana retail sales tax the county receives.
County Finance Director Chad Eaton explained that the overall average monthly difference is a .4 percent decrease, or roughly $3,000 to $4,000 less going to the county.
He noted that equates to approximately $30,000 less annually.
Maez noted there “aren’t many” retail marijuana stores under county jurisdiction.
There are currently seven retail marijuana storefronts in the Pagosa Springs area, with two under county jurisdiction and five under town jurisdiction.
“That could change … or not,” Medina said.
Weaver indicated that the current marijuana retail store owners do not want to see more storefronts popping up, as they believe the market is currently saturated and that more stores will not increase business, but rather spread it around.
Eaton explained that the county is waiting on reimbursement for marijuana retail sales tax for the past two months that was paid to the town.
Weaver mentioned that with the legalization of recreational and medical marijuana in neighboring states such as New Mexico, the marijuana industry in Colorado is starting to see a decline in sales figures.
“It’s not quite the attraction as it used to be,” Weaver said.
clayton@pagosasun.com
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