WA Lawmakers Weigh Rec Tax Change

Washington State recreational marijuana shops have been struggling underneath a heavy tax burden, but state lawmakers could soon deliver some relief – in stages, at least.

A proposed bill being considered by policymakers would reduce the current excise tax structure – 25 percent each time cannabis changes hands, from producer to processor to retailer – to a single tax paid by consumers. According to The Seattle Times, the suggested change would institute a 37% tax, and downgrade that to 30% in July 2017, and then 25% in 2019.

Sales tax would still be collected as well.

The bipartisan bill, sponsored by a Democrat and a Republican in the state Senate, aims to make the taxes on the industry sustainable, since many business owners in Washington say they’ve either been operating at a loss or just breaking even because of the current tax rates.

To alleviate some of the tax pressure, some operators have come up with innovative ways to take more federal deductions, such as bundling paraphernalia along with marijuana-infused products, The Times reported.

5 comments on “WA Lawmakers Weigh Rec Tax Change
  1. Steven North on

    There is no further Federal deduction. The reduction is in the LCB portion, that is not deductible. Cost of Goods sold remains the same. However, the non-deductible (280E) Excise tax will decrease.

    Reply
  2. Victoria Smith on

    Huh. So a 75% tax rate is inhibiting retail sales. Who would have thought? Not the rocket scientists in WA’s state legislature. Sigh. Come to Denver CO, where the recreational rate is a mere 20%. Still too high, but certainly not ridiculous.

    Reply
  3. David on

    Victoria Smith
    Colorado may have a better tax structure. It also overprices edibles for MMJ patients. Coming to Colorado means a flight often with a layover in Phoenix or Salt Lake City that makes it faster for me to fly to Paris than Denver. Plus Colorado has a very cold winter climate. This may be good for the winter ski industry but Western Washingtonian’s are not used to cold. We live with mist but are blessed with having a maritime temperate climate. Where our Western Valley’s hold Temperate rain forests which rarely drop below 32F. The similper solution is for Washington residents to change the greediest of our state politicians at the ballot box in 2016 that will enact change rather quickly. Regards.

    Reply

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