This article was originally published on the Marijuana Patients Organization site on October 19, 2013.
To tax or not to tax, that is the question. Several states including Washington claim medical cannabis is not eligible for the retail sales tax exemption provided for prescription drugs. State law provides an exemption from retail sales tax for certain drugs, but only when prescribed as authorized by the laws of the state. However, cannabis is a Schedule I controlled substance and cannot be prescribed under either federal or state law in Washington or any other state.
What about other states? Many tax the dispensary owners or put permitting fees in place, and several states impose a retail sales tax. Compare the different state taxing schemes below. It appears that once marijuana is ‘prescribed’ it will not longer be eligible for taxation. Will that make it much more difficult for the federal government to legalize. After all no one (even states) likes giving up revenue, especially states that have begun to depend on the aid.
[col grid=”2-1 first”]Alaska[/col][col grid=”2-1″]No sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Arizona[/col][col grid=”2-1″]5.6% sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]California[/col][col grid=”2-1″]Varies, 7.5% state sales tax, also local taxes[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Connecticut [/col][col grid=”2-1″]6.35% state sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Illinois [/col][col grid=”2-1″]1% sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Maine[/col][col grid=”2-1″]5% sales tax and 7% meals and rooms tax on edible products[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Massachusetts [/col][col grid=”2-1″]No sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Michigan[/col][col grid=”2-1″]No sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Nevada[/col][col grid=”2-1″]6.85% to 8.1% state and local sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]New Hampshire[/col][col grid=”2-1″]No sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]New Jersey [/col][col grid=”2-1″]7% sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]New Mexico[/col][col grid=”2-1″]5.125% to 8.8675% depending on location[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Oregon[/col][col grid=”2-1″]No sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Rhode Island[/col][col grid=”2-1″]11% sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Vermont[/col][col grid=”2-1″]No sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Washington[/col][col grid=”2-1″]6.5% sales tax[/col][hr color=”light-gray” width=”100%” border_width=”1px” ]
[col grid=”2-1 first”]Washington, D.C.[/col][col grid=”2-1″]6% sales tax[/col]
I think the country should be prepared for their to be a tax on marijuana, because there is no other way for government to make money besides the deduct income tax and that’s only if the public declares their medical marijuana sales on their 1040. So unless the government starts winning the war on drugs which is never gonna happen. So be prepared the government will tax the sale of marijuana cause they need their cut too.
Normalize cannabis. Sales tax is applied to goods by category and usage, not raw material. Prescription cannabis treatment should be exempt from sales tax where other prescription medicines are exempt. Cannabis consumer products should be taxed like all other consumer products. What is all this brouhaha?