SACRAMENTO – California NORML has declared its opposition to a bill to impose a new 15% state excise tax on retail purchases of medical marijuana (SB 987 by Sen. McGuire). The tax would be in addition to the current 7.5+% sales tax plus various local business taxes assessed by some localities.
“At this time when providers already face burdensome new costs under the Medical Marijuana Regulation and Safety Act (MMRSA), it is unwise and unfair to impose any new state tax on medical marijuana,” says California NORML director Dale Gieringer. Many patient advocates regard taxes on medicine to be unjust in principle.
The tax in SB 987 is modeled on a similar 15% tax that would be imposed on all retail marijuana purchases under the proposed AUMA legalization initiative. “If AUMA passes, SB 987 is redundant and moot,” says Gieringer, “If not, it will only encourage marijuana suppliers to move to the illegal, untaxed, unregulated adult use market.”
Proceeds of the tax would be divided between the general fund, local oversight agencies, state parks, drug and alcohol treatment programs, and environmental restoration for land damaged by illegal growers. In a statement, Sen. McGuire said that the taxes are needed to compensate “communities that have long been paying the price of the negative effects of cultivation brought on by the ‘bad actors’ who destroy the environment and bring in crime.”
“It is neither just nor appropriate to charge those who are doing their best to supply medicine legally to patients for the costs caused by illicit traffickers,” remarks Gieringer. “Cal NORML remains firmly opposed to taxation without legalization.”
SB 987 needs a 2/3 vote in order to pass. Although tax bills are typically defeated by Republican opposition in Sacramento, some Republicans, such as Board of Equalization member George Runner, favor taxing marijuana.
In other legislative action, a package of technical amendments to MMRSA is being sponsored by Asm. Bonta. Among other things, AB 1575 would establish a Board of Equalization advisory group to help marijuana businesses comply with federal law; prohibit local governments from overriding state packaging and safety standards; allow transport of live plants by nurseries; provide for “virtual dispensaries” to sell marijuana without a storefront; exempt licensed growers from existing civil penalties for production of controlled substances; allow researchers to access and use licensed marijuana, etc.
Another bill, AB 821 by Asm. Mike Gipson, would authorize the BOE to collect taxes from licensed dispensaries by other means than electronic transfer. Current state law requires electronic transfers for tax payments of $10,000 or more, but this is impossible for many dispensaries because federal regulations prevent them for accessing legal banking services.
Several bills to fix federal banking regulations have been proposed in the Congress, but continue to be stalled by the Republican leadership.
