banking marijuana industry bank
Marijuana Business News

Hypocrisy On Display: Illinois Bank To Collect All Medical Marijuana Sales Taxes

banking marijuana industry bankAny owner of a marijuana business will tell you that a lack of banking options for the industry is a huge problem. For a very long time banks had a standing policy of not doing business with marijuana companies. Then the federal government came out with ‘guidance’ that was supposed to make banking for marijuana businesses easier. The guidelines just created more confusion than anything, and most marijuana businesses are without a bank to work with. The ones remaining can get their accounts shutdown any time.

So my eyebrows raised a bit when I read an article about how a bank in Illinois will collect and process all of the medical marijuana sales taxes for the entire state. Per Herald and Review:

A Springfield bank will process Illinois sales taxes from cash medical marijuana purchases after submitting the only bid for the contract.

Illinois National Bank executives said Thursday they decided to submit a bid after assurances from state and federal banking regulators regarding handling cash from Illinois’ pilot medical marijuana program. They said it amounts to an extension of services it already provides the state.

The bank will process receipts for the sales tax of 7 cents per ounce from cash purchases, the (Springfield) State Journal-Register reports. The contract allows the bank to charge transaction and service fees, and the sales tax receipts would be transferred to the state.

That seems to be a double standard. It’s a conversation that I had with some friends once upon a time in regards to any state with marijuana tax revenue being generated. Marijuana businesses are not allowed to make bank deposits. However, if some of that money is given to the government via taxes, the government can make marijuana money deposits, even though at the end of the day the original source of the money is the same either way.

Obviously, that’s not fair. The same goes for every state that generates tax revenue. If the government is able to make deposits of marijuana industry money, so too should the marijuana industry itself be able to make deposits. The marijuana industry is massive, and getting bigger everyday. There’s no reason that the industry should be expected to operate on cash alone. It’s a public safety issue that needs to be addressed immediately.

  • SilentPatriot

    That’s rich, man! =P

  • Shackleton Bohannon

    Bank of America ACCEPTS deposits for taxes and licensing fees on behalf of the State of Washington. Bank of America also PROHIBITS opening any business bank account or merchant account for any marijuana related business. Period. Say…Whaaa???

    http://www.huffingtonpost.com/the-/bank-of-america-will-acce_b_3993219.html

    One of the biggest hurdles that companies generating revenue in the marijuana industry have to face is finding a financial institution willing to accept them as customers. The Liquor Control Board in the state of Washington was in the same situation until the Bank of America agreed to permit them to deposit anticipated marijuana related profits in their vaults.

    Most banks are leery of dealing with marijuana businesses simply for the fact that under federal policy, the government views money from marijuana transactions as money laundering.

    Bank of America declares it is willing to accommodate new marijuana related businesses, according to Jim McIntire, Treasurer for the state of Washington. “I mean, in fact, we’re already taking some tax revenues, I believe, for medical marijuana. So it’s not a real issue in terms of their perception.”

    The Liquor Control Board will begin taking in revenue this fall via applications fordifferent types of marijuana licenses and will need a place to deposit those funds. McIntire pronounced that his office has conducted numerous discussions with Bank of America and that “Bank of America is fine with that,” and he goes on to say that “they assure us that’s not a problem for them.”

    • Denny

      If the feds or the guy with the presidential ink pen would reschedule it this wouldn’t be an issue.

      • But he used to belong to the “choom gang”. Isn’t that enough? /sarc

  • Seven cents an ounce sales tax? That would mean ounces sell for about a dollar.

    You believe that?

  • Social Conservative

    Banks are run by redneck conservatives that hate everyone (hippies, gays, blacks, women, foreigners, etc) but other rednecks. Is it any wonder we are engulfed in hypocrisy?

    • Money laundering is more profitable for banks than regular banking. Roughly ~30% profit vs ~5% profit. Banks are not driven by hate. They are driven by money.

  • AntiIgnorant

    Bernie has the right plan. Just remove cannabis from the drug schedule altogether! End cannabis prohibition!!!

  • Dave Jensen

    I feel their pain, in Wa St it is written into our F’n Constitution; no tax on medicines. They got around that to collect their pound of flesh in illegal taxes..”The more things change, the more they stay the same.” A F’n POX on them and theirs, hope they rot in hell.

    • calvet11

      Not the way I would have said it, but………………when your right your right.

  • We must save our States from the taint of corruption.

    No taxes on cannabis.