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.
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:
- The illegal market can be marginalized by law enforcement or low taxes.
- Only low taxes can defeat legal tax competitors.
- Tax competition threatens local retail taxes more than state retail taxes.
- Tax competition threatens local producer taxes much more than state producer taxes.
- Federal legalization would ipso facto expose state taxes to daunting competition.
Oglesby, Pat, Marijuana Revenue Competition — Look Out Below (May 7, 2018). State Tax Notes, Vol. 88, No. 6, 2018. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3190279