DENVER (CN) – Colorado overtaxes marijuana and is engaging in criminal activity by taxing something that is federally a crime, a “registered issue committee” called No Over Taxation claims in state court.
No Over Taxation and five “marijuana consumers” sued Gov. John Hickenlooper, the Colorado Department of Revenue, Denver Mayor Michael Hancock and the Denver Treasury Division in Denver County Court this week.
The plaintiffs claim that because marijuana use and distribution is still a federal crime, charging taxes on it makes the actual collection of money criminal.
“Marijuana taxes assessed at the state or local levels are assessed on activities that violate federal law. Federal law is supreme over, and pre-empts state or local law,” the 37-page complaint states.
“Marijuana taxes are in part rationalized in order to fund state and local regulatory schemes, aiding and abetting the illegal for-profit distribution of marijuana. Taxes specifically designed to be collected on illegal activities are void for illegality. The statutes providing specifically that taxes are to be collected on illegal activities are against public policy, and are therefore void.”
The plaintiffs claim that Hickenlooper and Hancock are knowingly engaging in crime as well.
“The Hickenlooper/Hancock Continuing Criminal Enterprise engages in knowing criminal behavior,” the complaint states. “The Colorado attorney general has previously advised the governor and Colorado General Assembly that the state marijuana regulatory regime is a violation of federal law, and cited letters from numerous U.S. attorneys in states where medical marijuana is legal under state law.”
No Over Taxation seeks declaratory judgment that marijuana taxes are unconstitutional, an injunction to stop the tax collection.
The plaintiffs are represented by Robert Corry in Denver.
The suit, filed Monday. came two days before the Denver City Council and Finance Committee met to discuss how they would spend the taxes collected on medical and recreational pot.
According to KMGH-TV in Denver, Hancock proposed spending $3.5 million in marijuana tax revenue on business, regulation and public safety.
There is no indication whether any of the defendants know about the lawsuit.
Counting all taxes, licensing and fees, marijuana has brought at least $17 million to Colorado since the state legalized recreational use in January, according to The Associated Press.
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