Marijuana tax chart and slides

Slides are at Generic weed ALCOHOL FIRST tax slides 4 December 2019-4

Here is chart:

Center for New Revenue

Pat Oglesby, Www.newrevenue.org, 4 December 2019

 

Recreational FLOWER Excise Taxes STATUTORY Pre-Retail ACTUAL Pre-Retail % OR /gram Retail
Canada (ex Manitoba) Greater of 10% or $1/gram Greater of 10% or $1 Provinces vary
Alaska $50/oz. $1.76 0
California $9.25/oz. indexed; now $9.65/oz. $0.34 15% X (Wholesale price + 80%)
Colorado 15% $0.33 15%
Illinois 7% 7% 10% target
Maine $335/pound $0.74 10%
Massachusetts 0 13.75%
Michigan 0 10%
Oregon 0 20%
Nevada 15% $0.76 10%
Washington 0 37%

 

All states taxing weight have categories taxed lower than flower (bud) — like trim (leaves, shake).  Most recreational states impose standard retail sales (non-excise) taxes, too, if they have them; e.g., Massachusetts’s total retail tax goes from 13.75% to 20%.  Colorado and Nevada adjust weight taxes periodically to tax 15% of recent market prices.  California indexes its weight tax for inflation.  California and Colorado use actual price in certain non-related party sales.  Canada taxes some products by THC content.

 

Taxes on medical range from zero to 100% of the recreational rate.

 

More at https://newrevenue.org/2018/06/06/cnr-recommends-cannabis-tax-chart/; https://itep.org/taxing-cannabis/.  Corrections: po@newrevenue.orgor 919 619 8838.  Updates and more info at www.newrevenue.org.  More background on cannabis revenue at https://www.rand.org/pubs/research_reports/RR864.html (Chapters 4 and 5 and Appendix B).

 

 

 

 

Taxes on Recreational Marijuana Flower, 2 December 2019

Recreational FLOWER Excise Taxes STATUTORY  Pre-Retail ACTUAL Pre-Retail % OR /gram Retail
       
Canada (ex Manitoba) Greater of 10% or $1/gram Greater of 10% or $1 Provinces vary
       
Alaska $50/oz. $1.76 0
California $9.25/oz. indexed; now $9.65 $0.34 15% X (Wholesale price + 80%)
Colorado 15% $0.33 15%
Illinois 7% 7% 10%-20%-25%
Maine $335/pound $0.74 10%
Massachusetts 0   13.75%
Michigan 0   10%
Oregon 0   20%
Nevada 15% $0.76 10%
Washington 0   37%

 

As of 2 December 2019.  Please send corrections:  po@newrevenue.org.

Colorado and Nevada adjust weight taxes periodically to tax 15% of recent market prices.  California indexes its weight tax for inflation.  All states taxing weight have categories taxed lower than flower (bud) — like trim (leaves, shake).  Most recreational states impose standard retail sales taxes, too, if they have them.

Taxes on medical range from zero to 100% of the recreational rate.

More at https://newrevenue.org/2018/06/06/cnr-recommends-cannabis-tax-chart/; https://itep.org/taxing-cannabis/

 

Taxing weed and wealth

At the National Tax Association conference in Tampa earlier this month, my panel on marijuana tax policy was a sideshow.  The hot and trendy topic was taxation of wealth.

It has always been better to tax wealth than to tax income.  As the old adage says:  Money is like manure.  When it’s piled up, it stinks; when it’s spread around, it makes things grow.  Discouraging income is kind of weird.  But we can observe income much more readily than we can observe wealth.  Income moves, so it should be visible; wealth stands still, so it can be invisible.  This is the distinction between flow and stock.  An income tax is a weak proxy for a wealth tax, but it may be the best we can do, so that’s what we’ve got.

So an income tax is like a tax on weed by weight.  Taxing marijuana flower or any raw plant material by THC appeals to drug policy purists, but it’s not practical, for reasons easily findable on this website.  Taxing raw plant material is much easier to do.  Like the income tax, it’s not theoretically great, but it kind of works.  A more perfect tax may not.

 

 

Best,

Income tax purity and 280E

The anti-ad feature of 280E will be a hard sell at a marijuana tax panel for the National Tax Association in Tampa today.  The audience is mostly economists.  Many economists start with the notion that all income should be taxed alike – capital gains and ordinary income, for instance.  And many think deductions should not discriminate, either, so corporate integration fans don’t like favoring interest over dividends.  So singling out marijuana ads (I’d add ads for tobacco and alcohol) will find principled objections.  But we’re not going to tax marijuana like milk.  Excise taxes are OK, but since Free Speech means we can’t ban ads, taxation is a middle ground.

Veterinary marijuana

The hardest issue around marijuana taxation is medical.  I stipulated in my first article, in 2011, that cannabis has medical uses.  But how to decide who is using medically?  I’m speaking Friday at a conference of mostly economists, the National Tax Association, in Tampa.  I don’t expect much help in answering the medical vs. recreational question.

Here’s a story, from California activist Brett Stone, about veterinary use for his dog Walley: Continue reading Veterinary marijuana