The Tax Foundation says marijuana taxes not based on price are “untenable.” That’s wrong. Colorado has been merrily collecting millions on a de facto weight-based tax from Day 1 of legal marijuana sales.
Here’s the full quote: “Because marijuana can be purchased as a cigarette, an edible, a liquid, or a vapor, all with a wide variety of concentrations, a specific excise tax is untenable. Each state thus far has framed its tax as a certain percentage of the retail or wholesale sales price.”
Well, not Alaska – though collections there by weight at $50 an ounce, $1.76 per gram, have yet to start. [UPDATE, 1 December 2016: Collections have started. http://highfinancereport.com/alaska-receives-first-tax-payments-from-marijuana-businesses/. And the rate is still $50 per ounce, http://www.tax.alaska.gov/programs/programs/index.aspx?60000. That’s despite a Tax Foundation indication that that tax “May change before implementation in late 2016.” http://taxfoundation.org/article/marijuana-legalization-and-taxes-lessons-other-states-colorado-and-washington.]
But the proof that a “specific” excise (here, one based on weight) is not untenable turns up in Colorado. OK, Colorado “frames” its producer tax as 15 percent of sales, but actually collects tax on every gram by weight. And it has done so from the very get-go of legalization, with collections starting in early 2013. Continue reading “Tax Foundation overlooks Colorado’s de facto per-gram marijuana tax”
The Center for New Revenue 