280E and fees

January 26, 2015 § Leave a comment

Drafters of state marijuana revenue proposals might try to help the industry by making sure state taxes are federally income-tax-deductible under Code section 280E. That could be tricky. Lots more here.

State fees, as opposed to taxes, have a big advantage for states: A state can collect fees for licenses and applications and so on up front — to finance the operation of putting a new system in place.  The state needs to spend money to make money, « Read the rest of this entry »

Alcohol Excises — Lowry

January 25, 2015 § Leave a comment

This Congressional Research Service document about alcohol excises is in the public domain but it’s so hard to find that I’m saving it here:  Alcohol Excises — Lowry.  A more general document is by the same author, Sean Lowry, is here or at https://newtax.files.wordpress.com/2014/11/federal-excise-taxes-lowry.pdf,  His piece on marijuana excises, with Jane Gravelle, is here or at https://newtax.files.wordpress.com/2015/01/fed-mj-tax-r43785.pdf.

 

 

Dynamic scoring for sin taxes

January 24, 2015 § Leave a comment

What will happen if tax laws change? Republicans, newly in control of Congress, want to change the rules. Here are the stakes: the official predictions of what will happen determine whether a tax bill is a budget-buster – so maybe if it can pass or not.

CBO and Joint Tax have been not using, for budget purposes, so-called dynamic scoring, but the new 114th Congress is working on that.  “Current rules require calculating a policy’s direct cost to the government, which includes looking at how affected individuals and firms would react to the policy.  But dynamic scoring goes further by requiring that budget estimates also take into account how policies could affect the total size of the economy.”  http://www.whitehouse.gov/blog/2015/01/06/dynamic-scoring-not-answer« Read the rest of this entry »

6 Ps for marijuana tax bases

January 21, 2015 § Leave a comment

Beau Kilmer, beneficent captain of the RAND team that wrote the Report Considering Marijuana Legalization: Insights for Vermont and Other Jurisdictions, has come up with 9 Ps to help analyze marijuana legalization: Production, profit, promotion, prevention, penalties, potency, purity, price, and permanency. (I’d add “Patients,” to address whether tax exemption for medical marijuana makes sense, but that’s a side issue, addressed here.  And “Patience” will come in handy.)

As a corollary to those Ps, here is a way to think about marijuana’s tax base (the measuring stick to which a numerical rate is applied), discussed at pages 76-87 of that Report, using six more Ps:

Pounds « Read the rest of this entry »

Considering Marijuana Legalization — RAND

January 16, 2015 § Leave a comment

Insights for Vermont and Other Jurisdictions:  by Jonathan P. CaulkinsBeau KilmerMark A. R. KleimanRobert J. MacCounGregory MidgettePat OglesbyRosalie Liccardo PaculaPeter H. Reuter.

Here and http://www.rand.org/pubs/research_reports/RR864.html.  My revenue supplement is at Vermont Supplement.

 

Extreme marijuana monopoly

January 16, 2015 § Leave a comment

At one extreme is a seed-to-sale monopoly.  To provide security, the state could put the growing outdoors, surrounded by fences and cameras, in the middle of the campus of a land grant University, or at the state’s version of a College of Agriculture and Life Sciences.   To identify legal product, scientists might develop genetic or biological markers.

Tom Barthold

January 13, 2015 § Leave a comment

Congratulations to Tom Barthold, who stays on as Chief of Staff of the Joint Committee on Taxation, who keeps his job.  http://www.bloomberg.com/news/2015-01-12/republicans-retain-tax-bill-scorekeeper-picked-under-democrats.html.  We were on staff at the same time, and I have only good things to say about him.

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