Jacob Redmond
Well-Known Member
As you might be aware, in 2000 Hawaii enacted a medical use of marijuana law (Act 228, Session Laws of Hawaii 2000). The problem, of course, has been how to get this medical marijuana to those who need it without violating other laws. This year our Legislature is working on House Bill 321, which would establish standards for and regulation of medical marijuana dispensaries.
The bill started off in the House, and was referred to three committees: Health, Judiciary, and Finance. It passed all three and went over to the Senate. The Senate referred the bill to four committees, Health, Public Safety, Judiciary and Labor, and Ways and Means.
After the first two committees, the bill was still a regulatory bill. It then was heard by Judiciary and Ways and Means jointly, and those committees amended the bill by, among other things, adding two sections. One creates a special general excise tax rate for retail marijuana sales with a rate of 10 percent. The other imposes a GET surcharge on the same sales. That rate is 15 percent. So here we have a magically appearing levy: Instead of a rabbit coming out of the hat, we get a hefty new 25 percent tax.
But that's not the whole story; the impact to customers will be quite a bit more. Retailers pass along the GET to their customers, and that amount becomes part of the retailers' revenue and is taxed again. So if I sold you a ukulele for $100, added tax of $4.50, and you bought it for $104.50, my tax would be 4.5 percent of $104.50, which is more than the $4.50. That's why most retailers on Oahu pass along 4.712 percent, because 4.5 percent of $104.71 is $4.71, and the retailer then gets the original sales price of $100 after tax.
But guess what happens if the tax rate is 25 percent and the sale is in Honolulu? What would you have to pass on to get the original sales price of $100? The answer is: 34.228 percent! Imagine any customer seeing that kind of tax on the bill.
The committee report by the JDL and WAM committees recites that they changed the effective date of the bill to 2059 in order to "encourage further discussion." But by whom? All of the public comment to date was on a regulatory measure. No public testimony was taken on the idea of slapping a huge tax on these sales, because no one in the public had any clue that a whopping new tax was in the works. And, because this bombshell was dropped in by the bill's final committees, there may not be any opportunity whatsoever for public comment on it.
Whether you like marijuana or hate it, the premise behind this bill is that there are sick people who need it as medicine. The first section of the bill says that the medical use of marijuana law was "to provide medical relief for seriously ill individuals in the State." We have had special treatment in our GET law since 1986 for sick people who are prescribed medicine. In that situation, the tax imposed upon sales of medicine is not several times the normal rate, it is zero. Z-E-R-O. We are proposing to impose confiscatory taxes on what the bill says is necessary medicine. What kind of compassion is that?
One reason to rail against magically appearing provisions, taxes or otherwise, is that we need robust public debate about matters that may become law. Legislators and the public alike roundly criticized the Turtle Bay bill last year for its magically appearing provisions, and the discussion this year shows that it had serious flaws. Are we going to allow history to repeat itself with another episode of "Ready, Fire, Aim?"
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: Tom Yamachika: No Compassion in Overtaxing Medical Marijuana - Civil Beat
Author: Tom Yamachika
Contact: news@civilbeat.com
Photo Credit: Cory Lum
Website: Hawaii News - Honolulu Civil Beat - Investigative Reporting
The bill started off in the House, and was referred to three committees: Health, Judiciary, and Finance. It passed all three and went over to the Senate. The Senate referred the bill to four committees, Health, Public Safety, Judiciary and Labor, and Ways and Means.
After the first two committees, the bill was still a regulatory bill. It then was heard by Judiciary and Ways and Means jointly, and those committees amended the bill by, among other things, adding two sections. One creates a special general excise tax rate for retail marijuana sales with a rate of 10 percent. The other imposes a GET surcharge on the same sales. That rate is 15 percent. So here we have a magically appearing levy: Instead of a rabbit coming out of the hat, we get a hefty new 25 percent tax.
But that's not the whole story; the impact to customers will be quite a bit more. Retailers pass along the GET to their customers, and that amount becomes part of the retailers' revenue and is taxed again. So if I sold you a ukulele for $100, added tax of $4.50, and you bought it for $104.50, my tax would be 4.5 percent of $104.50, which is more than the $4.50. That's why most retailers on Oahu pass along 4.712 percent, because 4.5 percent of $104.71 is $4.71, and the retailer then gets the original sales price of $100 after tax.
But guess what happens if the tax rate is 25 percent and the sale is in Honolulu? What would you have to pass on to get the original sales price of $100? The answer is: 34.228 percent! Imagine any customer seeing that kind of tax on the bill.
The committee report by the JDL and WAM committees recites that they changed the effective date of the bill to 2059 in order to "encourage further discussion." But by whom? All of the public comment to date was on a regulatory measure. No public testimony was taken on the idea of slapping a huge tax on these sales, because no one in the public had any clue that a whopping new tax was in the works. And, because this bombshell was dropped in by the bill's final committees, there may not be any opportunity whatsoever for public comment on it.
Whether you like marijuana or hate it, the premise behind this bill is that there are sick people who need it as medicine. The first section of the bill says that the medical use of marijuana law was "to provide medical relief for seriously ill individuals in the State." We have had special treatment in our GET law since 1986 for sick people who are prescribed medicine. In that situation, the tax imposed upon sales of medicine is not several times the normal rate, it is zero. Z-E-R-O. We are proposing to impose confiscatory taxes on what the bill says is necessary medicine. What kind of compassion is that?
One reason to rail against magically appearing provisions, taxes or otherwise, is that we need robust public debate about matters that may become law. Legislators and the public alike roundly criticized the Turtle Bay bill last year for its magically appearing provisions, and the discussion this year shows that it had serious flaws. Are we going to allow history to repeat itself with another episode of "Ready, Fire, Aim?"
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: Tom Yamachika: No Compassion in Overtaxing Medical Marijuana - Civil Beat
Author: Tom Yamachika
Contact: news@civilbeat.com
Photo Credit: Cory Lum
Website: Hawaii News - Honolulu Civil Beat - Investigative Reporting
