A tax battle has been brewing for a while now in Washington State. Medical marijuana dispensary owners maintain that they don’t have to pay taxes because they don’t sell medical marijuana. The federal government disagrees, and considers transactions at medical marijuana dispensaries to be sales. The feds are going after dispensaries in Washington State for enormous sums of money. Per King 5:
At Viskovich’s shop, medical marijuana patients donate money to support growers who donate their plants. However, the Department of Revenue considers those donations a business transaction, and recently sent Viskovich a notice.
“For over $1 million in back-taxes,” she said.
Viskovich’s dispensary is one of an estimated 117 in the state with delinquent sales tax payments. That’s about a quarter of the state’s 443 registered dispensaries, adding up to about $9.5 million. The DOR admits, however, that their calculations of who owes what are rough estimates.
The tax battle in Washington highlights the need for an official regulated system in Washington. When medical marijuana dispensaries operate without a licensing system and clear rules, it leaves the dispensaries open to attacks by law enforcement and government officials, and at the same time the State misses out on revenue. Dispensaries are not going away in Washington State, so why wouldn’t the State just bring them on board, like Oregon did?