Center for New Revenue opposes repeal of per-ounce marijuana tax in Alaska

Email to Erika McConnell, Director of the Alaska Alcohol and Marijuana Control Office

Dear Ms. McConnell:

The cannabis industry naturally wants to repeal the weight-based, per-pound tax you have in Alaska. http://komonews.com/news/local/alaskas-legal-pot-industry-decries-taxes-seeks-changes

The state and the people have interests that conflict with those of the industry. Continue reading Center for New Revenue opposes repeal of per-ounce marijuana tax in Alaska

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Marijuana Revenue Competition — Look Out Below — in State Tax Notes

Marijuana Revenue Competition — Look Out Below

Exclusive license with State Tax Notes expired, so here is  the article: Tax Competition FINAL STN 5.7.18 Oglesby, from State Tax Notes, Vol. 88, No. 6, 2018.

Abstract

Beyond the ever-present illegal market, a more subtle threat to marijuana revenue lurks:

Tax competitors (think: tax havens) threaten subnational jurisdictions that can’t or don’t control their borders.

This article presents a framework for looking at threats to marijuana revenue: Continue reading Marijuana Revenue Competition — Look Out Below — in State Tax Notes

CNR recommends cannabis tax chart

This is the best comparative chart on cannabis taxes I’ve seen, from an 800-person law firm.  The big accounting firms were still steering clear of marijuana, last I heard, and this is the biggest law firm I’ve heard of.

It glosses over the way Nevada always taxes by weight.  https://newrevenue.org/2017/07/02/nevadas-70-cent-per-gram-tax-on-marijuana-flower/

And it glosses over the way Colorado often taxes by weight.  https://newrevenue.org/2017/07/23/is-colorados-new-marijuana-tax-leaky/

I haven’t read the whole thing, but I haven’t found any other problems so far.

UPDATE:  Louisiana’s sales tax will apply to medical cannabis, we learn after publication of the chart, which reported it as “unclear.” http://www.theadvocate.com/baton_rouge/news/business/article_504d1b92-6f24-11e8-94c2-5bd6afda20a5.html.  And, unlike the chart, I don’t see an argument that Louisiana excise tax will apply.

http://www.foxrothschild.com/content/uploads/2018/05/Cannabis-Industry-State-Tax-Guide.pdf

On CNR site:  Cannabis-Industry-State-Tax-Guide

 

 

California cannabis tax collections explained.

I asked California Department of Tax and Fee Administration a couple of questions about why cannabis tax collections are coming in low.   At the end are the questions and the CDTFA’s helpful answers, from Paul Cambra.

My reactions:  I.  The producer or cultivation tax collected only $1.6 million in the first quarter because retailers some how brought untaxed products into inventory before the tax was effective on January 1.  Retailers then sold that untaxed product in early 2018.  The standard excise tax procedure for taxing jurisdictions is to apply a “floor stocks tax” to product that escaped tax as it came into inventory (and sits on the shelf or the floor).  See https://www.ttb.gov/tax_audit/floor-stocks-tax-faqs-answer.shtml.  California did not have a floor stocks tax, so had a short-term loophole.  Its effect will soon disappear.

II.  The 7.25% sales tax collected a lot compared to the 15% marijuana excise tax because the sales tax
1. includes pipes and t-shirts and so on;
2. is based on a real price, while the excise tax is often based on an artificial or phony price (the “average market price”) under California regs;
3. includes the 15% tax in the base (for an extra 1.0875% evert time).

Continue reading California cannabis tax collections explained.

Confused by California marijuana tax receipts

California released some info about cannabis tax collections May 11, 2018. I can’t figure some of it out. Questions below.

UPDATE: Dale Gieringer of California NORML answers, pointing out that most medical cannabis is not tax exempt. The only tax exemption is for product sold to patients who have bothered to get cards. So the sales tax figure is high because it includes sales of lots of medical cannabis. Few adult use licenses have been issued.

Continue reading Confused by California marijuana tax receipts

Answering objections to a tax on opioid marketing

What’s wrong with taxing marketing expenses of opioid sellers?  The article suggesting that tax in the hill.com is posted below (exclusive license has expired).

Here are some possible objections:

  1. The horse is out of barn – the problem is that this happened in the past. Most of the damage is done.

Response: Still, this works for the future.

  1. My tax policy friends will almost all insist, in the name of theoretical purity, on taxing all income the same. They will say these are real expenses, and should be deductible.

Continue reading Answering objections to a tax on opioid marketing

Marijuana revenue — can any state get $43 per capita, like CO and WA?

UPDATED Below:

I’m to be on a marijuana revenue panel in Connecticut on Monday, April 30. The folks in Connecticut, like everyone else, want to know the bottom line. Whew. That leaves aside the preliminary and necessary questions of what to tax (weight or stated THC, I would say) and tax rates.

OK, jumping the preliminary issues, here’s a wild guess: $155 million a year after the market matures in several years. That’s $43 per inhabitant times 3.588 million population.

The $43 number comes from Colorado and Washington, which legalized two years before any other state. Both those maturing markets are collecting just about that much cannabis tax revenue now. Continue reading Marijuana revenue — can any state get $43 per capita, like CO and WA?