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.