Marijuana activists sue to halt Colorado pot tax collections
By Keith Coffman DENVER (Reuters) - A group of marijuana activists in Colorado are suing to prevent the government collecting taxes derived from the state’s legal pot industry, saying it violates the right against self-incrimination guaranteed by the U.S. Constitution. The lawsuit, filed by local lawyer Rob Corry this week in Denver District Court, asks that a judge issue an injunction ordering the state and city of Denver to halt the practice. Corry, who also represents businesses in the marijuana industry and brought the suit on behalf of several marijuana dispensary owners and pot users, names elected officials and tax-collecting agencies as defendants in the complaint. Voters in Colorado and Washington state approved the legalization of recreational pot use by adults in 2012 ballot measures. Both are among nearly two dozen states and the District of Columbia that allow the use of medical marijuana, although cannabis remains illegal for any purpose under federal law. The 37-page complaint – which includes a history of marijuana prohibition in the United States – said that because of the federal ban, people who buy or sell pot implicate themselves in a crime, which violates the Fifth Amendment to the U.S. Constitution. "There can be no possible scenario where a person paying ... marijuana-specific taxes can also be in full compliance with federal law," the lawsuit said. The first retail pot outlets opened in Colorado in January, and Washington is set to follow suit this year. Corry also said the state’s 25 percent combined sales and excise taxes on marijuana sales have undermined what voters intended when they approved legalized cannabis in part to take the criminal element out of marijuana use. "The tax rates are so high that the underground market has experienced resurgence in Colorado," Corry wrote. Carolyn Tyler, a spokeswoman for Colorado Attorney General John Suthers, said the office will "aggressively" defend the state against any legal challenge. "Mr. Corry’s claims are bizarre and lack legal and logical consistency," Tyler said. Colorado has reaped almost $11 million in sales and excise taxes from recreational marijuana since retail pot shops opened in January, according to figures released this week by the state’s revenue department. (Reporting by Keith Coffman; Editing by Daniel Wallis and Jim Loney)
