Oregon Legislature Considers Retail Marijuana Tax
As Oregon prepares for the legalization of recreational marijuana on July 1, 2015, state legislators are considering making changes to how recreational marijuana will be taxed. Those in support of the changes see it as a more workable solution than a harvest tax, but those in opposition see it as just another cash grab by politicians.
Under current law, recreational marijuana taxes would be paid by the producer at $35 an ounce. However, amendments to two bills would effectively set the tax rate at 20 percent paid at the point of sale.
HB 2041 would allow towns to prohibit marijuana facilities within 1,000 feet of a school; and an amendment attached to the bill would place a 17 percent sales tax on retail marijuana product. HB 3400 would establish rules and regulations for the implementation of recreational marijuana and the amendment to it would allow municipalities to levy a 3 percent sales tax if local voters approve it.
The 3 percent tax amendment is being used to help end a disagreement between state and local municipalities over how much power towns have to ban recreational and medicinal marijuana facilities. Although future challenges over the issue may appear in court, this small compromise helps end the issue for now.
The reason why legislators want to move away from a harvest tax and toward a sales tax is to make it easier to work with. For example, by taxing at the point of sale, dispensary owners would potentially be able to sell both recreational and medicinal marijuana without confusion.
Sen. Ginny Burdick, speaking with The Associated Press co-chair of the joint committee implementing Measure 91, has claimed that the 17 percent rate was chosen to keep Oregon marijuana cheaper than marijuana in Colorado and Washington, as well as keeping consumers out of the black market.
However, taxes in Colorado are already far lower than what is being debated in Oregon. In fact, Gov. John Hickenlooper signed a bill on June 4, 2015, so that recreational marijuana taxes will fall from 10 percent to 8 percent starting in 2017. There is also a planned tax-holiday for marijuana on September 16, 2015.
Regardless of workability, many Oregonians still feel cheated by lawmakers for trying to pass the taxes. When voters approved Measure 91, they did not vote for a sales tax; they voted for a $35 an ounce harvest tax.
Right now, nothing is set in stone, and both bills have yet to go to the House. In that time, changes may or may not come; and even then, the Senate may make changes of its own. Lawmakers could be circumventing the intentions of Measure 91; however, the state still needs a solid tax system that will not harm consumers or the industry.