Katelyn Baker
Well-Known Member
Boston – Marijuana won't be legally sold in Massachusetts for another 18 months, yet lawmakers are already being pushed to hike taxes amid warnings of a flourishing black market if rates are set too high.
A voter approved law, parts of which went into effect Dec. 15, allows residents 21 and older to posses up to an ounce of marijuana in public and up to 10 ounces at home, and to grow up to a dozen plants on their property.
The law sets a 3.75 percent excise tax on marijuana sales, now due to begin in July 2018, with proceeds being used to offset the costs of regulating retail outlets, growing facilities and testing.
Communities can impose an additional 2 percent tax on sales, which also will be subject to the state's 6.25 percent sales tax.
But some state officials say the combined 12 percent levy won't be enough to cover the cost of regulating a multimillion-dollar industry. They're prodding legislators to raise the levy, possibly as high as 30 percent.
Rep. Brian Dempsey, D-Haverhill, said he agrees the tax might be too low to cover the cost of regulation, but he's concerned that increasing it by too much will drive illicit pot sales.
"So we really need to take a balanced approach," said Dempsey, who chairs the House Ways and Means Committee.
The House and Senate are expected to form a new committee to study the issues, he said.
If lawmakers raise the excise lax, it could be the second significant change to the legal marijuana law approved by voters on Nov. 8.
On Friday, Gov. Charlie Baker signed a bill passed by a handful of lawmakers in the waning days of the year delaying the start of recreational marijuana sales by six months – until July 2018. The move prompted protests from supporters of legal marijuana.
Rep. Lenny Mirra, R-West Newbury, agrees that lawmakers should be cautious about ratcheting up the tax. He has opposed increases on other "sin taxes," such as those on alcohol and cigarettes, to drum up revenue for the state.
"If we set the price too high above the black market, then people will revert to getting it on the street," he said. "Getting rid of illegal sales is one of the reasons people voted to approve it."
Massachusetts is one of 28 states and the District of Columbia that allow medical marijuana sales, but the state doesn't tax those. Some lawmakers have floated the idea of taxing medical pot dispensaries, but it hasn't gained much traction.
State Treasurer Deborah Goldberg, whose office will oversee a three-member Cannabis Control Commission to oversee retail sales, has said the pot tax is too low.
"We should have the revenues to not only cover the operation, but to be able to benefit the local communities, who are going to incur a great deal more cost," she told WBUR recently.
Goldberg hasn't suggested a specific levy, defering to lawmakers.
A state Senate committee that studied issues surrounding legalization suggested a marijuana-specific tax from 10 percent to 20 percent, an excise tax on growers of 5 percent to 15 percent, and an optional tax for communities of up to 5 percent.
The ballot measure allows the Cannabis Control Commission to review marijuana taxes annually and suggest that lawmakers raise or lower them.
Some states where recreational pot is legal have taken steps to reduce tax rates, citing concerns that legalizing marijuana hasn't reduced black market sales.
Oregon reduced pot taxes from 25 to 17 percent late last year, while Colorado's tax rate will drop from 29 to 27 percent in July.
Alaska's rate is 25 percent, while Washington D.C. is prohibited by federal law from taxing and regulating pot sales.
Maine, which legalized marijuana in the November elections, has set the rate at 10 percent while California, which also legalized pot in the recent elections, set a 15 percent rate. Nevada voters approved a 15 percent excise tax as part of a ballot initiative legalizing recreational use.
Last year, the nonpartisan Tax Foundation found that legal marijuana markets in Colorado and Washington have raised more revenue than initially estimated.
Colorado, which projected collections of $70 million from marijuana taxes, raked in nearly $140 million last year, according to the foundation. Washington, where marijuana sales average over $2 million a day, expects revenue to reach $270 million per year.
A spokesman for the Campaign to Regulate Marijuana Like Alcohol, the committee that pushed for legalization in Massachusetts, said supporters set the tax rate low specifically to eradicate illegal sales.
"We wanted the tax to be low enough to fund the regulation and administration of the initiative, but also to undercut the illicit market," said Jim Borghesani, the committee's spokesman.
He is urging lawmakers not to rush to raise taxes.
"They should allow the system to get up and running and then decide if they need to adjust the tax rate," he said.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Some Urge Higher Taxes On Massachusetts Marijuana Sales
Author: Christian M. Wade
Contact: 317-272-5800
Photo Credit: Morgue
Website: The Flyer Group
A voter approved law, parts of which went into effect Dec. 15, allows residents 21 and older to posses up to an ounce of marijuana in public and up to 10 ounces at home, and to grow up to a dozen plants on their property.
The law sets a 3.75 percent excise tax on marijuana sales, now due to begin in July 2018, with proceeds being used to offset the costs of regulating retail outlets, growing facilities and testing.
Communities can impose an additional 2 percent tax on sales, which also will be subject to the state's 6.25 percent sales tax.
But some state officials say the combined 12 percent levy won't be enough to cover the cost of regulating a multimillion-dollar industry. They're prodding legislators to raise the levy, possibly as high as 30 percent.
Rep. Brian Dempsey, D-Haverhill, said he agrees the tax might be too low to cover the cost of regulation, but he's concerned that increasing it by too much will drive illicit pot sales.
"So we really need to take a balanced approach," said Dempsey, who chairs the House Ways and Means Committee.
The House and Senate are expected to form a new committee to study the issues, he said.
If lawmakers raise the excise lax, it could be the second significant change to the legal marijuana law approved by voters on Nov. 8.
On Friday, Gov. Charlie Baker signed a bill passed by a handful of lawmakers in the waning days of the year delaying the start of recreational marijuana sales by six months – until July 2018. The move prompted protests from supporters of legal marijuana.
Rep. Lenny Mirra, R-West Newbury, agrees that lawmakers should be cautious about ratcheting up the tax. He has opposed increases on other "sin taxes," such as those on alcohol and cigarettes, to drum up revenue for the state.
"If we set the price too high above the black market, then people will revert to getting it on the street," he said. "Getting rid of illegal sales is one of the reasons people voted to approve it."
Massachusetts is one of 28 states and the District of Columbia that allow medical marijuana sales, but the state doesn't tax those. Some lawmakers have floated the idea of taxing medical pot dispensaries, but it hasn't gained much traction.
State Treasurer Deborah Goldberg, whose office will oversee a three-member Cannabis Control Commission to oversee retail sales, has said the pot tax is too low.
"We should have the revenues to not only cover the operation, but to be able to benefit the local communities, who are going to incur a great deal more cost," she told WBUR recently.
Goldberg hasn't suggested a specific levy, defering to lawmakers.
A state Senate committee that studied issues surrounding legalization suggested a marijuana-specific tax from 10 percent to 20 percent, an excise tax on growers of 5 percent to 15 percent, and an optional tax for communities of up to 5 percent.
The ballot measure allows the Cannabis Control Commission to review marijuana taxes annually and suggest that lawmakers raise or lower them.
Some states where recreational pot is legal have taken steps to reduce tax rates, citing concerns that legalizing marijuana hasn't reduced black market sales.
Oregon reduced pot taxes from 25 to 17 percent late last year, while Colorado's tax rate will drop from 29 to 27 percent in July.
Alaska's rate is 25 percent, while Washington D.C. is prohibited by federal law from taxing and regulating pot sales.
Maine, which legalized marijuana in the November elections, has set the rate at 10 percent while California, which also legalized pot in the recent elections, set a 15 percent rate. Nevada voters approved a 15 percent excise tax as part of a ballot initiative legalizing recreational use.
Last year, the nonpartisan Tax Foundation found that legal marijuana markets in Colorado and Washington have raised more revenue than initially estimated.
Colorado, which projected collections of $70 million from marijuana taxes, raked in nearly $140 million last year, according to the foundation. Washington, where marijuana sales average over $2 million a day, expects revenue to reach $270 million per year.
A spokesman for the Campaign to Regulate Marijuana Like Alcohol, the committee that pushed for legalization in Massachusetts, said supporters set the tax rate low specifically to eradicate illegal sales.
"We wanted the tax to be low enough to fund the regulation and administration of the initiative, but also to undercut the illicit market," said Jim Borghesani, the committee's spokesman.
He is urging lawmakers not to rush to raise taxes.
"They should allow the system to get up and running and then decide if they need to adjust the tax rate," he said.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Some Urge Higher Taxes On Massachusetts Marijuana Sales
Author: Christian M. Wade
Contact: 317-272-5800
Photo Credit: Morgue
Website: The Flyer Group
