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September 09, 2015

Weird tax law means no sales tax on pot for one day in Colorado

That day is not April 20

If you're planning to visit Colorado soon, you may want to mark Sept. 16 on your calendar.

A weird loophole in Colorado's tax law means that there will be no taxes on recreational marijuana for one day only, saving users around $20 off an ounce of pot, The Associated Press reported.

Colorado-area dispensaries are rejoicing, with one business owner telling the newspaper that "our hopes are high" that the store will get a flood of customers that day.

The reason for the one-day tax break is rather complicated. Colorado requires voter approval for any new tax, but if the state collects more than it projected, the tax is supposed to revert back to zero.

"That's part of the magic of living in Colorado," commented Governor John Hickenlooper to the Denver Post.

Colorado citizens will vote in November on whether to let the state keep the tax revenue, most of which will go to school construction and drug education, or to refund it back to the taxpayers and marijuana growers who paid excise taxes.

Lawmakers decided to suspend sales taxes and excise taxes for just one day in order to comply with the law. They chose September 16 because it's one day after the state finalizes the previous year's tax accounts.

One Colorado lawmaker told the Denver Post that there won't be any no-tax days in the future and "we'll never have this problem again," although really, that depends on your definition of the word problem.

Admittedly, the state is expected to lose over $3 million in revenue on that one day alone.