The amount of marijuana tax that Colorado collects for the first month of legalization, to be reported in early March, is unlikely to be a good proxy for a twelfth of a full year’s tax.
For one thing, Colorado’s 15 percent “wholesale” tax will start very slowly in the first few months and then gain steam. This slow start is due to a “one-time transfer” exception to the wholesale tax: Product originally owned by a medical marijuana business and then transferred to a recreational business during the startup of legalization will completely avoid the 15-percent wholesale excise tax forever. Continue reading Colorado marijuana taxes — Don’t extrapolate
UPDATE September 22, 2014: Ms. Habib notes: CBDA is an important standard but wasn’t available commercially. It is now available commercially.
Is THC content is a practical tax base for marijuana concentrates? I asked Rose Habib. She was part of the BOTEC team that worked on Washington’s marijuana laws, and is an analytical chemist with Cannabanalysis Laboratories in Montana, http://cannabanalysis.com.
To restate the question, can different labs measure liquid alcohol extracts and come back with THC results that are very different?
We have a good way to go. Here’s Ms. Habib’s full answer:
It is true that labs currently could take the same alcohol extract and get different results. Because of the homogeneity of the sample, we know that this is not because of sample irregularities, we can easily attribute that to lack of analytical accuracy.
In other industries like pharma or supplements or cGMP regulated industries there are validated methods Continue reading Taxing marijuana potency – Rose Habib
Treasury’s long awaited guidance on marijuana banking anticipates that banks will know what is in marijuana depositors’ tax returns. Continue reading Treasury and bank depositors’ confidential tax info
If the government wrote a check to every church’s minister, that would be Establishment of Religion, right? Then what about tax breaks for every minister? Code section 107 gives tax breaks for housing to any “minister of the gospel” (expanded in Regs to cover rabbis, imams, etc.). I think that’s the kind of establishment of religion the Founders forbade in the 1st Amendment.
A court agrees. Continue reading Establishment of Religion via Tax Break
Deferral and deferment may seem like synonyms, but international tax folks always use the word deferral for the tax break that multinationals get on foreign income — I’ve never heard deferment. Continue reading International tax: Deferral and Deferment
[Original here and at http://www.huffingtonpost.com/pat-oglesby/how-not-to-tax-marijuana_b_4739009.html%5D
With marijuana legalization gaining steam, we might ask not just whether to legalize and tax, but how. Here are three mistakes that California and other states can still avoid.
Mistake 1. Collecting late Continue reading How Not to Tax Marijuana — HuffPo
Unable to figure out a transfer price for a Constitutionally permitted 15 percent wholesale tax when vertical integration forbids the existence of a wholesaler, Colorado has substituted a weight based tax. Wow.
The excise tax is calculated by multiplying the quantity of retail marijuana product by the average market rate at the time, then multiplying by the 15% (excise tax rate). For example: ABC cultivator transfers 3 pounds of flower, 5 pounds of trim and 8 plants to ABC store. At the time of transfer the average market rates are:
$1,876 for Flower Continue reading Colorado converts percentage tax base to weight!