Collection point loophole?

May 23, 2015 § Leave a comment

UPDATED May 24:  “Seth Crawford, a marijuana policy researcher at Oregon State University, estimates the state grows three to five times the 150,000 pounds or so consumed by Oregon pot users,” writes journalist Jeff Mapes.

So shifting from a tax on producers to a “point of sale tax” at retail, described at http://newrevenue.org/2015/05/20/oregon-shifts-to-retail-percentage/, would leave the bulk of production tax-free, for export, right?  No wonder growers don’t want to pay tax.  Or am I missing something?  UPDATE:  A friend says I am:   « Read the rest of this entry »

Indoor grows and canopy tax — An expert comments  

May 20, 2015 § Leave a comment

Preface by PO to the expert’s comments:

If you tax marijuana by canopy area – square feet of space under cultivation – you might be able to measure the area by aerial or satellite images.  That comports with a principle of taxation – tax what you can measure.  The RAND Report for Vermont says potency of raw flowers, and, in many cases, price, can’t be reliably measured.  So canopy area has a lot of appeal as a tax base.

But those images won’t detect indoor cultivation.  Here is some earlier discussion and criticism of an electricity tax aimed at singling out indoor growers. Meanwhile, more powerful batteries may make it harder for law enforcement to detect indoor grows – while reducing the environmental harm from those grows.

But if you want to collect tax on all commercially grown marijuana, what should you do?

I don’t necessarily agree or disagree with the following comments.  But they help the process.

An expert in the industry has this to say:

 “What would you do about indoor cultivation is levels and levels of tricky.  This will take heavy lifting. « Read the rest of this entry »

Oregon shifts to retail percentage? — May 25, 2015 update

May 20, 2015 § Leave a comment

See UPDATE May 25, near the end of this post, for a somewhat more developed analysis.  Still thinking this through.  THIS WILL CHANGE.

Jeff Mapes at the Oregonian writes:

SALEM—Oregon legislators on Monday unveiled a proposed retail sales tax for marijuana that would replace the harvest tax approved by voters.

The proposed sales tax was one of the major provisions included in a new 104-page amendment aimed at implementing the marijuana legalization initiative approved last November by voters. « Read the rest of this entry »

Unresolved tension could fracture and kill CA reform efforts

May 19, 2015 § Leave a comment

Here are excerpts from a May 13 article by David Downs in the East Bay CA Express that I pass along without necessarily agreeing:

California 2016 legalizers must chose between angering the medical marijuana community with new regulations, versus gaining mainstream voters — who want to see the pot trade “controlled.”

. . .

“Most experts agree that California has among the least structured systems of rules « Read the rest of this entry »

280E and California Advertising

May 19, 2015 § Leave a comment

I assigned copyright, so the article is online here or http://marijuanalegalization.about.com/od/RelatedIssues/fl/Down-the-Rabbit-Hole-of-Cannabis-Taxation-and-Advertising.htm.  There’s no paywall.

 

 

What is Advertising? – Ways & Means and Rachel Barry  

May 18, 2015 § Leave a comment

While thinking about loosening 280E to allow tax deductions for everything but advertising, you need to define advertising.  This is in connection with an article on 280E as applied in California, here or http://marijuanalegalization.about.com/od/RelatedIssues/fl/Down-the-Rabbit-Hole-of-Cannabis-Taxation-and-Advertising.htm, where this post appears as a hot link.

Defining advertising, for tax purposes, has been done.  There have been lots of proposals to disallow deductions for advertising by requiring amortization of amounts paid to advertise. A recent one came from Republican Ways and Means Chair Dave Camp, and another came from Democratic Senate Finance Chair Max Baucus.  To make that reform happen, you need to define advertising.  (This is a Tax Reform staple.

« Read the rest of this entry »

Technicalities of California marijuana advertising discrepancy  

May 15, 2015 § Leave a comment

This is a technical explanation of California law that backs up an article here or http://marijuanalegalization.about.com/od/RelatedIssues/fl/Down-the-Rabbit-Hole-of-Cannabis-Taxation-and-Advertising.htm.  Corporations can deduct, on their California state income tax returns, their expenses for advertising and marketing marijuana.  But individual businesses cannot.  Pass-throughs to individuals, like S corporations and LLCs, don’t provide these deductions to individuals.

Since 1982, Federal Tax Code section 280E has said sellers of federally illegal drugs, like cannabis, can deduct only “cost of goods sold” – the cost of producing or buying the product.  California follows — “conforms” to — that federal law for individuals, but not for corporations.  « Read the rest of this entry »

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