Oregon Reworks Marijuana Tax Structure

Oregon’s legislators proposed a new retail sales tax for marijuana designed to replace the harvest tax approved by voters last November. While the new sales tax didn’t cite a specific percentage, staffers are reportedly working the numbers to charge roughly as much as the harvest taxes.

There are number of advantages to charging sales tax versus the flat $35 per ounce tax on marijuana flowers and $10 per ounce tax on marijuana leaves originally proposed in the Measure 91 initiative.

Sales taxes would be address fluctuations in the price of marijuana, particularly as the price of marijuana has dropped in recent months. Without the ability to move alongside the price, legal marijuana may no longer be competitively priced compared to black market options, opening the door to crime.

A sales tax would also enable retailers to easily exclude medical marijuana patients from having to pay the tax, which could lower the cost of medical marijuana by eliminating the harvest tax imposed on the raw materials for it.

The difficulty of passing a sales tax stems from the fact that the state doesn’t normally charge a sales tax and its citizens tend to be vehemently opposed to such measures. In addition, the lack of an existing system means that the state would have to setup an entire sales tax structure in order to begin charging it.

These sales tax issues represent just one of many hurdles that have plagued Oregon’s legal marijuana industry. With the Oregon Liquor Control Commission saying they won’t be able to have licensed retailers up and running until the fall of next year, some senators are pushing for the start of temporary sales. The state is also dealing with proposals that would enable cities to ban marijuana from their borders, which could throw another fork in the whole process.

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