Colorado’s Latest Per-Gram Tax Rates

Colorado de facto taxes cannabis bud now at 27 cents a gram, trim at 14 cents a gram, wet whole plants at 5 cents a gram, bud for extraction at 8 cents a gram, and trim for extraction at 6 cents a gram. Those rates apply to vertically integrated operations and related party transactions, where an actual arm’s-length transaction does not happen.

Those tax rates are 15 percent of the “Average Market Rate,” updated from time to time at https://www.colorado.gov/pacific/tax/marijuana-taxes-file: Continue reading Colorado’s Latest Per-Gram Tax Rates

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IRS Opens Cannabis Tax Task Force

Patrick Oglesby, former Congressional tax committee staff lawyer and founder of the Center for New Revenue, a North Carolina-based tax policy nonprofit, has been named to head a new IRS-Treasury Task Force on cannabis tax policy.  IRS Chief Counsel W. Paul Wilkins said, “We welcome Pat back to government service.  With marijuana legalization looming on the federal level, the executive branch needs to weigh in – and to have someone work with Congress to develop tax laws we can effectively and efficiently administer, including a marketing-focused substitute for 280E.” Continue reading IRS Opens Cannabis Tax Task Force

Tax on Robocalls — Making It Simple

University of Texas-Arlington Professor Roger Meiners proposes a tax on robocalls in the Wall Street Journal.  The rate would be one cent per call.  To make it work without litigating which calls are unwanted, he would apply it to ALL calls.  That’s simplicity over fairness.

He proposes:  “Even a chatterbox who makes 50 calls a day would pay a mere $15 a month” for 1500 calls.  That seems pretty doggone low.

Since we need to identify the phone that is making the calls, can’t we start the tax, like income tax, with a standard deduction per phone number?  Give every number 1500 calls a month.  So make 1500 calls or fewer, you owe no tax.  For 1600, you owe $1 ((1600 -1500) x $.01) .  That seems fairer — if it’s doable. Continue reading Tax on Robocalls — Making It Simple

280E and Logos

How should taxpayers and the IRS treat logos under 280E?

A cannabis seller’s removable logo may leave  the object to which it is affixed deductible.  A non-removable logo, I’d guess not, but I’d welcome hearing the other side of the question.

Tax law so far has put little weight on the line between cost of goods sold and selling expenses.  A singular exception is section 280E:  Sellers of cannabis can deduct only cost of goods sold, so advertising and marketing expenses lose out.  Plain packaging of cannabis is deductible, but how about packages with branding, or logos? Continue reading 280E and Logos

Does New York’s opioid tax idea make sense?

To replace a tax or fee on opioids, discussed here that has been ruled unconstitutional, Governor Cuomo’s New York budget proposes a straightforward opioid tax based on morphine milligram equivalents (MMEs):

The tax is would be a quarter of a cent ($.0025) per MME if wholesale the cost per MME is less than fifty cents ($.50).

The tax is would be a cent and a half ($.015) per MME if wholesale the cost per MME is greater than or equal to fifty cents.

So weak opioids would taxed less than strong ones.  Can’t the user just take a lot of weak opioids and get the effect of one strong dose?  Are opioid products so different that they merit discontinuous tax burdens?  And why have a flat tax amount once a threshold is reached? Continue reading Does New York’s opioid tax idea make sense?

How is bud-trim line working in California?

A fair argument against weight-based taxes on raw marijuana plant material is that different parts of the plant need different tax rates.  So categories are needed.  A particularly difficult line to draw may be that between bud (flower) and trim (leaves).  That topic has been covered here, in a link below in my message to the California Department of Tax and Fee Administration via www.cdtfa.ca.gov/contact.htm. Continue reading How is bud-trim line working in California?