Why Colorado has a tax-free holiday for marijuana

An accounting error in Colorado is paying off for marijuana consumers Wednesday, when a quirk in a state tax law prompts the state to suspend most taxes on recreational pot.

The one-day pot tax holiday means Colorado won't collect 10 percent sales taxes on pot. The state is also suspending a 15 percent excise tax on marijuana growers.

The tax break is happening because Colorado underestimated overall state tax collections last year. Under the state constitution, the accounting error triggers an automatic suspension of any new taxes — in this case, the recreational marijuana taxes voters approved in 2013.

The taxes revert to 25 percent on Thursday.

Until then, retailers are hoping for big crowds. The state had no estimate on how many shoppers might turn out.

As The Christian Science Monitor reports, Colorado has brought in more than $150 million in marijuana tax revenue, according to official state data. 

"The big lesson we tell other states is you probably shouldn't legalize marijuana if you want to make money – that's not why you do it," said J. Skyler McKinley, deputy director of the governor's Office of Marijuana Coordination, to the Huffington Post. "You do it because you think that a regulated marketplace might be safer than an unregulated marketplace, or you believe that the war on drugs didn't work."

Colorado began directing some marijuana revenue toward school and research programs in May, including providing grants to public school districts and charter schools, an education official told The Huffington Post. Almost $24 million was allocated to the Building Excellent Schools Today program, said Kevin Huber.