May 202015
 May 20, 2015
marijuana taxes tax

(via dailyfinance.com)

A little known fact about my home state, Oregon, is that we do not have a sales tax. This if fairly rare in America these days. I remember traveling to surrounding states with my family growing up, and being bewildered by seeing a price tag on a pack of baseball cards, but then having to pay extra once I got to the cash register. It was a very foreign concept to me growing up. Now that I’m older and pay a state income tax, which is basically the trade off for no sales tax, it makes more sense to me.

Sales taxes have always been a sticking point in Oregon. Voters do not like the idea of a sales tax, and don’t support it. I think that was why drafters of Oregon Measure 91 decided on a ‘harvest tax’ instead of a sales tax. Measure 91 proposed a flat rate of $35 per ounce for harvested recreational marijuana flower that will be sold. There was a smaller harvest tax for trim that is popular when making marijuana infused edibles and concentrates. The Oregon Legislature is trying to change the recreational marijuana tax structure, from one that taxes the flat rate at the time of harvest, to one that they call a ‘point of sale tax’ which is essentially a sales tax, just renamed to not stir up any outrage from Oregon voters. Per Oregon Live:

Prozanski said a sales tax would better accommodate fluctuations in the price of marijuana. He said that marijuana flowers – the most potent part of the plant – have dropped in price recently and that a set-in-stone tax of $35 an ounce could make legal marijuana uncompetitive with the black market.

In addition, Prozanski and other legislators said a sales tax would more readily allow the sale of medical and recreational marijuana by the same retailer, who could simply exclude medical marijuana patients from having to pay the tax.

Legislators have talked for several weeks about moving to a sales tax, but at the Monday evening meeting of the House-Senate committee, they were careful to refer to it as a “point of sale tax.” Oregon is one of only a handful of states without a sales tax, which has always been staunchly resisted by voters at the polls.

I’m not sure how a sales tax would be better than a flat rate harvest tax. Legislators say that they are going to try to get the sales tax to match what the harvest tax would be, but if that’s truly the case, why change it at all? Oregon voters voted for a flat harvest tax, not a sales tax. Yet again, Oregon politicians are going against the will of the voters. The proposal did not include a specific sales tax percentage, so there’s no way of knowing what the end effect will be, but I’d much rather see Oregon Measure 91 implemented as it was written and approved by voters.

 

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  23 Responses to “Oregon Politicians Propose A Recreational Marijuana Sales Tax”

  1.  

    Oregon has an alcohol tax..second highest in the nation apparently.

    The harvest tax puts a minimum price on products..

    You have (C + x)/.66
    C=cost of production; cost ranges from $5-75/oz and is typically in the $20-50/oz range for most marketable products
    x= harvest tax; Oregon’s harvest tax would have been $35/oz on the grower

    .66= income tax; this is always factored into a producer/manufacturers price

    Lets say we look at cheap outs:

    ($10/oz + $35/oz)/.66=$83/oz to break even (includes paying salaries)- this is supposed to be a capitals country here people. The big hubub about medical is this equation.

    Current outs gets: $50-80/oz with no tax on the grower, easily cheated income tax requirements, and easily cheated production requirements.

    Fire will get you $115-125/oz cash max at an actual dispensary; same easily cheated system. Heck, I barely got $130/oz for award winning tier ‘ACDC’ that is super fussy and very low yielding. They priced it in the same range as ‘Blue Dream’ for example and that is a high yielding cut…you know that grower made more profits than me; an real honest chuck selling actual medicine following the actual production rules.

    The sales tax on the consumer is better because it is always a percent of shelf price which allows for cheap items to be produced profitably and because the consumer is the reason for the tax in the first place. People are concerned about consuming the plant more than growing it. Most people seem to be for growing non drug cannabis. Also, growers have complicated enough production regimes to keep after let alone taxes which are really meant to counter problems with consumption. It is more fair on the producer and the consumer since all items are taxed a for a.

    The real reason- the authorities figured out the $35/oz flat tax on the grower would cause huge amounts of +25%THC flowers and high strength concentrates to dominate the market….and since they would would prefer you minimize your consumption if not abstain, they would rather allow you to have the option instead of what would have happened where the only options would be the highest potency.

    I was giddy with the flat tax on the grower because I wouldn’t have to compete with low quality, low cost drugs as I produce only upper tiered products. But otherwise, I think its more fair. I’m good with either way. Maybe soon the pot crowd will prove its not a bunch of degenerates and we can get the taxes repealed substantially.

    •  

      Speak for yourself narcotroll, MM growers are not degenerates and have nothing to prove, especially up against the likes condescending Foghorns posing as legit growers.

      •  

        Thank you Old Soul !!! This moron has been squeezing in his opinion (or police action) for months. I believe he is one of the Washington three CBD corporations that are anti anything cannabis (just leave their hemp alone). If one believes in anything except hemp their brains are deeply and sadly damaged by “dope!” If hemp must share a space in the world with cannabis it must be highly taxed. I brought the issue of taxation up a few months ago (my point being that Oregon has no sales tax and he was quick to respond to my comment by stating how easy and constitutional (Oregon State constitution) a sales tax on cannabis would be and made me out the fool for believing there would be any problems in implementing one!!! I know several growers in Oregon and I am seeking to start a different sort of canna-business in the state. Before one may even create an Oregon business one must be a resident!!!! For anyone seeking to join with their several Oregon associates and friends they must risk all. This is not an inviting method of doing business because if I were a carpetbagger I could incorporate as fast as IBM or Microsoft in Oregon. Luckily I have a high class grower willing to allow me to (if her connections like my presentation) invest in my plan and allow me an Oregonian status until I can get the move made. Great job and thank you!!!

        •  

          Thank you for your dedication and kind words!

        •  

          AWWWW :(

          Need some “medicinal” salve for that sandy vagina of yours?

          Were you selling $150 oz 10 years ago? I was. Were you showing up to class openly high and outperforming your sober peers? I was..how about arguing with religious nuts about personal liberty? I was..It goes on

          I’m just against dumbasses gaming the system for an easy life they don’t earn..Grow your own or pay the price. If you are sick, elite growers like my self can produce for 20 patients per card.

          If you have a way to make THC not get anyone high but keep the “medicinal” traits, I will push that..I am not for people lying about “medical necessity” to get cheap highs (reference redundant statement above).

          BTW…bulk CBD or THC will make no one any money in 10 years..There is only money in fine quality products and no one is going to put fine quality products out for as cheap as now when actual hemp is grown everywhere. Hint; those corporations probably don’t think their business model is a loser….oooo…and anyone getting into the game without being an elite grower who intends on producing is dumb (I’m thinking of every well heeled investor here)

          BTW, if you weren’t a moron, you would know there is a 2 year residency clause. You won’t beat me or the rest of the Oregon residents looking to cash in. I won’t be working for “employers” or “investors” from anywhere either. Hopefully the rest of the Oregon crew doesn’t bow to capital pressure and forges a boom or bust on skills alone.

          •  

            My days as a top flight grower was in the $35 to $45 a quarter oz days of 1984 – 1991 and it saved the family farm from a bankruptcy sale, we were able (as a corporation) to make that decision at our leisure and it brought a hefty price. I know cannabis quite well and it is no secret that you would be considered a carpetbagger that has no compassion for anyone but himself. I have been over and over Oregon Cannabis Laws and each statute I have seen has provisions for new arrivals to the state. I know the critical times that one would be wise to monitor their plants 24 hours a day. Would many of your strains exist without the hard work of those in the “Green Triangle?” They came to me each year I owned the family farm for stock that is likely bred into many strains that you grow for your patients. What did they want with a Midwest sativa? Far shorter flowering times than the sub-tropical strains that were being imported.
            You seem to need my credentials, O.K.:
            Member of the SDS long before I graduated High School. Who needs some vagina care now as I used more than a flapping mouth.
            High school, graduated in the top 10% of my class.
            College, Dean’s list in all but one semester.
            Top employee at a transitional facility for the institutionalized.
            Top research assistant at the U of Iowa.
            Saved the family farm as described above.
            Temp to an offer of general manager in a year at a franchised Garden Center.
            Created my own successful promotional and recording business with my wife’s connections with Warner Studios I was able to make a very good living after surviving a rare form of pancreatitis.
            Moved away from Des Moines and worked as a heavy equipment operator.
            Survived a 500 year flood and was able to find opportunity in the high school emergency shelter.
            To get off disability I went to college where it was rare for me to not be on the President’s list. GPA 3.89 while focusing my education toward a medical cannabis degree.
            Have created a thesis which I experienced, cannabis is a medical preventative.
            I will no longer exchange any word or e-print on you as I see no value in wasting my bandwidth on a self-important ass such as yourself. Your attitudes almost make me ashamed to support cannabis, but it is vital to my health as well as the health of many who do not even realize they are using cannabis medically!!! Honestly, you make The Weed Blog a miserable place to visit or comment. I see none of your product so, could it be you are exactly what you accuse me of being. You will tic me off no more as I turn my back to you and will give your lying mouth no further consideration and I choose to act like a compassionate adult, not a playground bully. You no longer exist in my mind.
            Whyiowa4medical BSHA with Master’s thesis in medical cannabis.

      •  

        Hunting me now so I don’t poison the well for normalizing heavy drug use in society?

        Maybe you should try voluntarily living sober…I know I won’t

        I can tell you one thing, I am no slave to help losers stay high all day long when they couldn’t make their own stashes happen if they wanted.

        You are welcome to sell your products next to mine..I’m currently wholesaling fire for a offensively low price of $1800/lb…these people can’t furnish their own at that price but I am expected to. Thats fair.

        I will be pumping Gorilla Glue #4. Are you going to beat that? I have some fancy tricks up my sleeve too. There are a dozen or so other elite cuts at a special vendor I found…care to pick up the same cut and post results? Heck, I will even cite which dispensary will be selling it.

        Oh, and apparently those numbers I posted were legit since you took more issue with my “political agenda” instead of simply showing my math to be incorrect….since you know better than me about everything and especially cannabis and drug use..for sure

      •  

        http://medicalxpress.com/news/2015-05-psychedelic-drugs-legally-reclassified-benefit.html

        Your funny…maybe your “soul” isn’t as old as you wish

  2.  

    This is actually better. What if you’re selling your popcorn buds to an extract company doing a nug run? Do you pay $35/ounce or $10/ounce? It starts to get confusing and then you’re wasting FTE time trying to convince the OLCC that it should only be taxed at $10/ounce, and you’re wasting OLCC FTE time arguing with the licensee. Way less admin for the licensees and agency just to have an easy flat tax at the POS, and less admin saves everyone money in the long run.
    $35/ounce is $560/lb., which doesn’t sound like that great of a deal any more. $10/ounce for trim also doesn’t sound that great when you figure $160/lb. and a lb. of trim goes for like $300/lb.? If people think taxes are too high in Washington (roughly 41%), when you consider the cost per pound, it’s really not that much better, if at all, they way it sits currently.
    If it’s a sales tax rather than an excise tax it can be written off by the retailers when faced with 280e and filing their federal taxes. Washington is actually moving toward this right now with HB 2136 – expected to pass during the special session.

    I’m all for leaving the initiative alone and respecting the will of the voters, but I don’t think they fully understand the practical implications – they just want it taxed, but taxed at a fair rate that makes the state money but allows small businesses to thrive. If that can be done in a way that works the most efficiently for the system and ultimately benefits everyone, I would hope the voters could get behind that.

    •  

      Amen sister. Perfectly stated.

    •  

      Taxes and regulations are enforced by men with guns. Eric Garner.

    •  

      Popcorn buds are trim until you separate them from the actual leaves. Thats how.

      Also, just grow a concentrate crop..no trimming and no flower. Just whole plants being dried and put through the extractor. (grind em together if you are “worried” about it).

      These numbers are problems for poor people who want to be high all day long but aren’t intelligent or responsible enough to self supply. These people know the intent of taxation includes keeping prices up to reduce consumption.

      I don’t see how a business can function legitimately under 280E at all, so that aspect doesn’t seem relevant to me aside from the fact that I won’t be bothered with having another unit of complexity added to growing. What got me was that they thought a “harvest” tax is fair at all…they want to be fair, I can pay the same income tax as everyone else since I am not a consumer and consumption of drugs is the “perceived” problem..A pile of crack sitting in a room does no harm till a crack head consumes it.

  3.  

    The purpose of taxes and regulations is to support government and police. Especially police. Think of all the police who will lose their jobs when Prohibition ends. Something has to be done for them and the children.

    Every tax, every regulation comes with it an army of bureaucrats and behind that an army (with guns) of enforcers.

    He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

    No more taxed or regulated than tomatoes.

    •  

      The purpose of taxes and regulations is to continue to stress normal human beings enough in their daily lives, that they do not question the rich and powerful. So said powerful people can continue to live their lives in the elaborate ways in which they do. Having control of all the resources, and having the ability to sway the world. Police losing their jobs is a minor problem compared to the benefits that would be had if prohibition ended. I do agree with your second statement though. :-)

      •  

        I have nothing against the rich and powerful. I hope to join that category some day. OTOH some of those guys use government as a tool to oppress people. I favor smaller government. Much smaller government.

      •  

        Is that why you favor a progressive income tax structure and they don’t…oh, wait..you want the same perks as them but are not in that position? Surely, removing taxes wouldn’t change much for them..Its not like all of a sudden they wouldn’t just reduce your pay for the amount of change due to taxes or anything like that..Besides, an extra 30% for a median income will do little to change much about the situation.

        The absence of the strong progressive income tax is why we have ultra rich and ultra poor. Look at the income distribution in the USA during the 50’s..income taxes then were +50% for multimillionaires.

        Finally, no rich person took an aptitude analysis for their wealth…the average IQ of the billionaires is like 115. That isn’t something I hear anyone whine about…”hey, the elites are just rich commoners and that is the primary thing wrong with the world”

        Imagine a world where each individual’s wealth represented their relative abilities between each other…the income gap would be much smaller, but Donald Trump would be a median income earner instead of a multi millionaire.

  4.  

    The recent changes to the basic framework for m91 have changed drastically over the past several months: some good alterations, some egregious. The major changes I take issue with revolve around allowing localities the power to create additional taxes/fee structures, which will lead to continued black market sales.

    Allowing power to remain with the legislative assembly, opposed to sole power to tax with the state, lends m91 to even more dysfunctional changes that be enacted at the county and city level, provided they go through the appropriate steps to achieve those powers.
    This is in direct conflict with what the voters approved.
    To the point of this tax. This is also an affront to what we approved. There were clearly defined taxes/fees drawn up in m91. Those should have been adhered to, but the greed of our political system imposed its will yet again. As I am all for legalization and bringing this plant out of the shadows and on to the common streets for all to use, this saddens be deeply because I know what it yield.
    Petty drug dealers and those who wish to continue to use all of the services tax payers provide but wish to contribute nothing to that pool those services pull from will be given the extension they were looking for: hail to the black market!

    Thanks for more failed and corrupted laws on the books Oregon state legislature.

    •  

      Let me get this straight..You want the OLCC to be the sole proprietor of crafting the rules vs the legislative assembly? That is not to say I’d rather the locals have little authority over this..I just don’t see the history of “local rule” struggles as being much more benevolent than that of the 18th century Southerners in USA.

      I actually don’t care, but the anti-bureaucratic culture of Oregon is strong..this is not what I would think our political culture would want..My guess would be seed authority to legislator and locals. Thats just the way it appears to me.

      Oh, tell that to Old Soul. He seems to think tax evasion is not the action of a degenerate (I am assuming its a dude, it could be a chick). Low prices which support heavy use are a virtue to be held above all else apparently.

  5.  

    Really going either way is unfair to different parties. A flat rate harvest tax is imposed on the grower to pay, a sales tax is imposed on the purchaser of the product. There should be a smaller harvest tax, and a small sales tax. This would even it out among producer and consumer. It seems so simple, I don’t understand why they haven’t thought of this.

    •  

      The more growers pay in “harvest” taxes, the less lower quality products will be available..that means a market with more expensive, more potent products over all. I like that as a grower..it pushes market share towards the elites (elite growers, not the capital elites).

      Maybe we shouldn’t have excise taxes at all and our entire tax system should be a uniform progressive income tax with no breaks..

  6.  

    No Tax on Pot – We’ve Been ‘Taxed’ (incarcerated, fined, children stolen, property constificated, etc) since 1937.

    It’s time to stop it.

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