Adams may have to repay $1.36M

Adams County has collected more than $1.36 million through a 3 percent tax on recreational marijuana sales that the Colorado Court of Appeals found to be invalid.

The voter-approved tax generated $293,875 in the last six months of 2015 and $1,070,557 so far this year that may have to be refunded.

The Colorado Court of Appeals ruled Thursday that the tax is invalid, reversing a lower court decision and siding with the cities of Northglenn, Aurora and Commerce City, which sued over the tariff.

That leaves all of the money collected by the tax in limbo — including more than $500,000 earmarked for college scholarships for underprivileged students — while the county decides what to do next.

Adams County included $1.2 million in projected revenues from the tax in its 2017 budget, anticipating new recreational marijuana shops opening in Thornton.

The cities had initially sued in district court, claiming Adams County didn’t have the authority under state law to tax a single product. Coupled with their own taxes on pot, the cities argued that an additional county levy put retail cannabis retailers in their jurisdictions at a competitive disadvantage.

A judge ruled in Adams County’s favor in fall of 2015, and the cities appealed. The county began collecting the tax in July 2015.

A county spokesman said the scholarships that have been awarded will not be affected. Officials don’t know how quickly the county will stop collecting the tax.

A decision on how to respond won’t be made until at least Jan. 3, when the county commission meets. The county could file an appeal with the Colorado Supreme Court, which might stay Thursday’s ruling.