Colorado seeks eased federal banking, tax rules for legalized pot

Moving to build a regulatory framework for the legal recreational pot use, Colorado is pressing the federal government to modify banking rules and the tax code.

The state on Wednesday released a 166-page implementation plan drawn up by the task force assembled after the passage of Amendment 64, which makes it legal to smoke, possess and grow limited quantities of marijuana there.

Colorado Gov. John Hickenlooper (D) heralded the document, saying it “sets the stage for sensible regulation and enforcement in Colorado.”

But the “Highest State” (a nickname that refers to its lofty mountain peaks) is looking for help well outside Colorado’s boundaries.

Financial institutions, for example, are subject to federal regulation.

“Since marijuana is a controlled substance under federal law, banks must either refuse to hold accounts for legal marijuana businesses in Colorado or risk prosecution,” the task force wrote.

Among the 58 recommendations outlined in its report is consideration of a state resolution calling upon the federal government to exempt those businesses from the relevant regulations.

Another problem encountered by the task force is a section of the tax code that would bar legal Colorado marijuana businesses from claiming deductions.

The task force recommends that Hickenlooper enlist the state’s congressional delegation to press for an amendment to the tax code, and that the legislature approve a resolution calling on the Internal Revenue Service to make the change.