Oregon Could Levy 20% Sales Tax on Recreational Marijuana

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Cannabis businesses in Oregon could pay up to 20% in state and local sales taxes on recreational cannabis transactions under a tentative deal reached by lawmakers.

The agreement – which is still subject to change – would allow Oregon to collect a 17% tax on marijuana sales, while cities and counties could  levy a 3% sales tax, according to The Oregonian.

The 3% tax would replace a harvest tax that was originally written into Measure 91, which legalized recreational marijuana in the state.

Changing the harvest tax – which calls for a set dollar amount assessed on flowers, leaves and immature plants – to a percentage-based sales tax could drive prices up beyond what black market sellers are offering, critics have said. Legislators backing the deal told The Oregonian that it does the opposite.

The deal is a compromise in the wake of a battle between the state and municipalities over how much control cities and states will have in banning cannabis businesses within their borders.

Many localities are seeking the right to limit or flat-out deny businesses that want to open within their borders. Some state officials say that goes against the will of voters who approved Measure 91.