- Associated Press - Thursday, May 28, 2015

DENVER (AP) - Three suburban Denver cities are suing Adams County to stop it from collecting taxes from recreational marijuana businesses already being taxed by the cities and the state.

The lawsuit filed this week argues Adams County shouldn’t get tax revenue because it doesn’t have a regulatory system for recreational pot sales like the cities that are suing. The lawsuit also contends Adams County lacks legal authority to impose the tax, which voters approved in November.

Aurora, Commerce City and Northglenn filed the lawsuit. Commerce City is in Adams County, and portions of Aurora and Northglenn are as well.

An Aurora marijuana business, Terrapin Care Station, is joining the cities suing.

The lawsuit filed in Adams District Court says the cities and their marijuana businesses “will be harmed by imposing on customers an unauthorized special marijuana sales tax.” It also says the tax puts businesses at a competitive disadvantage with municipalities that don’t have an additional tax.

Adams County’s 3 percent tax is set to start July 1, but the lawsuit asks for it to be temporarily blocked while a judge considers the case. Ultimately, the lawsuit wants the tax thrown out permanently.

Colorado imposes a 10 percent sales tax on marijuana sales, and municipalities levy their own tax, too. For example, Aurora has a 2 percent sales tax on marijuana.

Adams and other counties argue they’re still impacted by the drug’s legalization, even if they don’t regulate it, because they have to pay for certain government services, like law enforcement.

County officials say they’re honoring voters’ wishes.

“Voters in Adams County and each of our municipalities approved this tax,” said Jim Siedlecki, an Adams County spokesman. “We are simply applying the will of our voters. This is what they approved.”

Chris Woods, owner of Terrapin Care Station, said Adams County’s tax “is a dangerous legal precedent to establish,” because other counties may follow.

Woods said an additional 3 percent tax on top of other sales taxes he has to pay will hurt his business.

“Over the course of the year for us, it’s significant,” he said.

Colorado lawmakers considered a measure this year that would allow counties to levy their own tax on marijuana sales, but the bill failed.

The lawmaker who sponsored that bill said she would’ve preferred a legislative solution.

“It’s always best not to take things to court,” said Sen. Mary Hodge, a Democrat from Brighton, which is in Adams County.


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