Current state marijuana taxes

This chart reflects legalization in Michigan on Election Day 2018.   Recreational is taxed at 10 percent at retail;  there is no change in taxation of medical, taxed at 3 percent if sold at a dispensary, but exempt if sold by a caregiver.  All cannabis is subject to the state’s standard 6 percent sales tax.
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State Flower Taxes Today

Note the bolding, above.  Nevada taxes all cannabis de facto by weight; Colorado taxes producers by weight unless there is an arm’s-length sale.

Oregon’s 20-percent number reflects a 17-percent state tax and universally adopted 3-percent local taxes.  Otherwise local taxes are more of a patchwork, and are ignored.  Colorado and Nevada have nominal 15-percent producer taxes.  Colorado converts its tax to a weight base for related party or vertically integrated cases. https://newrevenue.org/2017/07/23/is-colorados-new-marijuana-tax-leaky/. Nevada converts to a weight base for all cases. https://newrevenue.org/2017/07/02/nevadas-70-cent-per-gram-tax-on-marijuana-flower/

Details on Washington:  Exemption from 6.5% standard sales tax for medical marijuana: https://dor.wa.gov/find-taxes-rates/taxes-due-marijuana.  Obligation to pay 37 percent excise tax on medicalamarijuana: https://dor.wa.gov/sites/default/files/legacy/Docs/Pubs/SpecialNotices/2016/sn_16_med_endorsement.pdf.

S.2478 – End Taxpayer Subsidies for Drug Ads Act

Senators McCaskill and Shaheen have a bill to stop tax deduction for prescription drug ads. The American Medial Association and my drug policy friends approve.  This stoppage would treat Rx drug ads like marijuana ads — and nudge against them via taking away this tax break.  Maybe freedom of speech (for marijuana, in state Constitutions) won’t let us stop the ads, but we don’t have to subsidize them.

Proposed section 280I text includes:

No deduction shall be allowed under this chapter for expenses relating to direct-to-consumer advertising of prescription  drugs for any taxable year. 

Why not do the same for alcohol, tobacco, and opioids?

CNR comments to Vermont Marijuana Commission

Dear Members of the Vermont Marijuana Commission:

It was a privilege to serve as co-author of the RAND Report, Considering Marijuana Legalization: Insights for Vermont and Other Jurisdictions, http://www.rand.org/pubs/research_reports/RR864.html, and as the only attorney and tax person to do so.

I would be delighted to try to come to speak with you if you would be willing to hear me. In any event, here are the four main points I would make.

1.  Taxes can and need to go up over time. Already, economists say, “[D]espite having the nation’s highest tax rate, Washington . . . could generate significantly higher revenue by increasing the tax rate.” Continue reading CNR comments to Vermont Marijuana Commission

California 280E tax needs fixing

I was surprised and heartened to that California Governor Brown vetoed AB 1863, keeping non-deductibility of #marijuana#advertisingexpenses on California individual income tax returns. His rationale is revenue loss and the bill’s evasion of the budget process. https://www.gov.ca.gov/wp-content/uploads/2018/09/AB-1863-Veto-Message.pdf

And I was surprised and heartened to see that the California Legislature hasn’t overridden a veto since 1979.

So there is an opportunity for California to tinker with 280E conformity to treat individuals and corporations the same and not lose revenue. Continue reading California 280E tax needs fixing