A friend in the marijuana community told me that San Diego County, California, was going to pay people to tell them about local cannabis taxes. The application asks for lots of info and background — limited to 10 pages (!). Some of it is pasted below. I wrote a County official: “I don’t have the ambition to do all the work involved with the cannabis tax RFI [Request for Information, the application], so won’t apply for that work,” but sent along two articles on local taxes: a layperson’s piece from thehill.com, https://thehill.com/opinion/finance/372396-how-tax-competition-can-threaten-marijuana-revenue, and amore technical piece from State Tax Notes, https://newtax.files.wordpress.com/2018/06/tax-competition-final-stn-5-7-18-oglesby.pdf.
Then I wrote:
Some more pro bono thoughts. Local cannabis taxation is not scientific. You can’t be sure what the market will bear (if maximizing revenue is what you want). My hunch is that the study you ask for will cost you more than it’s worth. There’s no precise tax rate that a study will reveal. You just take a stab at it.
Your population is concentrated pretty far from borders with counties that might compete with you for cannabis trade if your push taxes too high; competition from Mexico has extra problems. You can look at how tax burdens in other California jurisdictions affect commerce nearby, and you can look at the Washington-Oregon border. Washington State Economic and Revenue Forecast, September 2016, Volume XXXIX, No. 3, https://erfc.wa.gov/sites/default/files/public/documents/publications/sep16pub.pdf
I wish I could help more.
With highest regards,
Someone once accused me of being “just a blogger with too much time on his hands.” Maybe so.
Here’s part of the document: