Pushback on 280E

November 12, 2016 § Leave a comment

A friend who is a tax policy expert writes, after I sent him my 280E article, https://www.brookings.edu/blog/fixgov/2015/12/18/how-bob-dole-got-america-addicted-to-marijuana-taxes/:

“Thanks for your article;  it’s really interesting and thought-provoking.  You make a better case for 280E than « Read the rest of this entry »

$50 million “blunder” in Prop 64?

November 12, 2016 § 1 Comment

California Board of Equalization elected Member Jerome Horton, an opponent of Proposition 64, came up with an October surprise to illustrate a weakness in the proposal. That weakness didn’t prevent its passage, but it lingers.

Member Horton alleged that a tiny, technical, last-minute drafting change in the California 2016 marijuana initiative could cost the state $50 million, starting in November. Indeed, the Board of Equalization has adopted his view and officially confirmed that the current sales tax on medical marijuana just disappears – for a while.

I don’t know how anyone would have standing to sue to reverse that ruling. So, apparently, unless the Legislature acts, the total tax on medical cannabis, over time, will be:

— 7.5%, (through the November 8 Election) then
— 0% (from certification of ballot results through 12-31-17), then
— 15% plus weight tax (starting 1-1-18).

That makes no sense to me. It’s a roller coaster ride, with no discernable rationale.  A “blunder.” « Read the rest of this entry »

Groundswell for local marijuana taxes in California

November 10, 2016 § Leave a comment

Drug Policy Forum of California provides these results of local California ballot measures, where it looks like every stand-alone marijuana tax increase passed.  CORRECTION:   The town of Colfax voted 63% for a tax measure that required a 2/3 majority.  That’s the only loser.  http://www.drugsense.org/dpfca/votersguide1116.html#LOCALS

Beyond percentage of price, tax bases include:
Canopy, with different rates for indoor, outdoor, and sometimes mixed light.
Weight, with different rates for bud and trim.

Some remembered indexing. One phases out canopy taxes when the State sets up a weighing program.


Here’s the story, quoted from the Drug Policy Forum of California:


AdelantoMeasure R would impose an excise tax of up to 5% on all types of commercial marijuana activities. PASSED 67-33% « Read the rest of this entry »

Excises at Duke

November 8, 2016 § Leave a comment

Keeping my mind off the election, I’m giving a guest lecture at my friend Peter Barnes’s VAT and Sales Tax class at Duke Law and Sanford Public Policy Schools today.  Readings are Sean Lowry’s excise tax study for the Congressional Research Service and RAND-Vermont chapter 5.

Slides are here: barnes-sales-and-vat-2016.  The word excise can mean cut out . . .

State plans to grow marijuana

November 8, 2016 § Leave a comment

[Update, 10 December 2016:  For libertarians, government sales are anathema. For liberals, nullification of federal law by a state or locality has a history of association with racism and even slavery.]

News from The Advertiser in Louisiana:

BATON ROUGE — Louisiana State University and Southern University are set to become the state’s biggest growers of marijuana – and they are looking for private investors to underwrite the project. « Read the rest of this entry »

Politico on 280E

November 1, 2016 § Leave a comment

Politico.com’s Bernie Becker has this on Code section 280E’s tax disadvantage for marijuana:

THE CASE FOR 280E: As we’ve noted here previously, the five states that have a chance to legalize recreational marijuana next week could nudge Congress into rethinking some of their positions on pot. Among the potential debates: whether to end the current provision barring legal marijuana dealers from deducting many of their normal business costs.

The case for exempting legal marijuana dealers from section 280E of the tax code — which is aimed at drug traffickers — is pretty simple: The current setup is unfair to businesses that are otherwise following state and local law. (Side note: The semi-regular news conference about legislation to allow pot dealers those deductions, featuring the odd couple of Democratic Rep. Earl Blumenauer of Oregon and Grover Norquist of Americans for Tax Reform, is one of Morning Tax’s favorite Capitol Hill events.)

As for the case for keeping 280E for even legal pot sellers, Pat Oglesby, a former Capitol Hill tax hand, maintains that the tax code section could be the most effective way to limit marijuana advertising, thus reducing the exposure to teenagers. “Maybe laws can’t stop marijuana marketing, but taxes can slow it down,” Oglesby wrote at Brookings last year. « Read the rest of this entry »

Trump as rebel hero

November 1, 2016 § Leave a comment

A big NYT article today explains how Donald J. Trump “pushed the edge of the envelope” to take preposterous “return positions” on his income taxes. For non-tax people, a “return position” is what you file, with the idea that it’s the most favorable outcome you could possibly hope for.

A return position can be so preposterous that it’s criminal tax fraud. That may be the case with Trump’s returns the NYT goes into. (I was heartened to see my old friend, the brilliant tax lawyer John Buckley, weighing in.)

But will this tax evasion or avoidance discourage voters from supporting him? Maybe not. If you distrust the establishment, cheating it is a badge of honor.

Many Americans today are angry to the point of destruction. Steve Earle takes the view of a frustrated rebel: « Read the rest of this entry »