Search Results for: taxes

U.S. Federal Cannabis Legalization Could Be Worth $128.8 Billion In Taxes And 1.6 Million Jobs

DISTRICT OF COLUMBIA: New Frontier Data, the authority in data, analytics and business intelligence for the global cannabis industry, releases its new study Cannabis In the U.S. Economy: Jobs, Growth and Tax Revenue, 2019 Edition. The report looks at the current state of legal cannabis jobs and tax revenues and projects the impact that full federal legalization would have on the U.S. economy, especially tax revenue generation and job creation. New Frontier Data forecasts that under full federal legalization the cannabis industry could produce nearly $130 billion in additional tax revenues and over 1 million jobs nationwide.

“With so much speculation about economic slowdown, the potential for federally legal cannabis to create up to a million new jobs and close to $130 billion in tax revenue is likely going to be of interest to regulators and presidential candidates in 2020,” said New Frontier Data Founder and CEO Giadha Aguirre de Carcer. “Cannabis is already being considered as an investment option for forward-looking portfolio and fund managers as a possible hedge against economic downturn impacting more traditional investments.”

Some of the report findings include that:

  • 2018-2019 YOY job growth in the cannabis industry generated nearly 82,000 jobs.
  • If full legalization occurred in all 50 states today, there would be in excess of 1.46 million jobs, increasing to 1.63 million jobs by 2025.
  • Full legalization would result in more legal businesses participating in the market, more consumers participating in the legal market, and more employees on official payrolls, resulting in $8.4 billion in payroll taxes. By 2025, payroll deductions would increase to $9.5 billion.
  • Assuming a 15% federal sales tax, total revenues from 2018–2025 would reach $73.7 billion. This amount would be entirely new revenue to the U.S. Treasury, as there are currently no federal sales or excise taxes.
  • The total combined taxes under full federal legalization would reach $175.8 billion between 2018–2025 based on business tax revenues, the payroll withholdings based on the estimated employment, and the 15% retail sales taxes.
  • The difference between the current structure and the theoretical model is a $128.8 billion increase in federal tax revenues.

A free Download of Cannabis In the U.S. Economy: Jobs, Growth and Tax Revenue, 2019 Edition is available at: https://newfrontierdata.com/jobs2019

Medical Marijuana Taxes To Illinois Total $57K In 1st Month

ILLINOIS: Illinois officials say the state’s first medical marijuana patients have purchased nearly $801,000 worth of cannabis during the program’s first month.

Program director Joseph Wright announced the figures Wednesday. The numbers indicate Illinois has collected roughly $56,550 in taxes from wholesale sales of medical marijuana during the month. Marijuana wholesalers pay a 7 percent tax to the state.

Wright says licensed dispensaries have served 1,713 unique patients. That’s nearly half the 3,600 patients who have been approved for the program.

Legal marijuana sales began Nov. 9 in Illinois. There are now 16 licensed dispensaries operating in Illinois.

Colorado Just Became The First State In History To Collect More Taxes From Marijuana Than Alcohol

COLORADO: No state has ever generated more tax revenue from marijuana than alcohol—until now.

The Colorado Department of Revenue, according to recently released figures, just brought in $70 million in taxes relating to marijuana, compared to less than $42 million for alcohol taxes, over the course of a year.

This Wednesday, Colorado is declaring a marijuana tax holiday, meaning that for a single day, taxes on marijuana items will be suspended.

Pioneer Pot States Have Collected More Than $200 Million In Marijuana Taxes

WASHINGTON AND COLORADO: The first two states to legalize recreational marijuana have collectively raked in at least $200 million in marijuana tax revenue, according to the latest tax data — and they’re putting those dollars to good use.

In Colorado, after about a year and a half of legal recreational marijuana sales, the state has collected more than $117 million in excise taxes from both the recreational and medical marijuana markets, according to the most recent data from the Colorado Department of Revenue.

Washington state got a slower start. Its retail shops didn’t begin selling recreational marijuana until July of last year, but they are keeping pace with Colorado’s. About $83 million in excise taxes have already been collected in the year since sales first began, according to the most recent tax data from the Washington State Liquor and Cannabis Board.

 

IRS Position On 502 Excise Taxes – “Don’t Count Excise Tax Amount As Income”

WASHINGTON: Dean Guske, CPA to many marijuana businesses in Washington State (and around the country),  and his firm, Guske & Company, have been taking the position with their clients since the beginning of the year that the 502 excise taxes DO NOT have to be counted as income when 502 Cannabis businesses file their federal income taxes.  Instead, the excise tax is a reduction from the net income.

This is in direct contradiction to what most people in the industry have thought was the position of the IRS – that the full amount taken in from sales would be counted as income before the excise taxes were paid to the Washington State Department of Revenue, and therefore would double tax the businesses by having to pay tax on income they didn’t get to keep.

But a new memo issued by the IRS today confirms Guske’s position, concluding that: “A taxpayer who paid the State of Washington marijuana excise tax should treat the expenditure as a reduction in the amount realized on the sale of the property.”

You can read the full memo here.

Year Of Legal Marijuana Nets State $70 Million In Pot Taxes

WASHINGTON:  Washington launched its second-in-the-nation legal marijuana market with just a handful of stores selling high-priced pot to long lines of customers. A year later, the state has about 160 shops open, tax revenues have soared past expectations and sales top $1.4 million per day.

And who knows – the industry might even start making some money.

Washington pot farmers, processors and retailers have complained all year that heavy state and federal tax burdens, along with competition from an unregulated medical marijuana market, have made it difficult for them to do business.

The Oregon Legislature’s Big Marijuana Pact: Negotiators Cut Deal On Taxes, Local Bans

OREGON:  Legislative negotiators have tentatively agreed on a sweeping marijuana deal that could produce a 20 percent sales tax on recreational sales of pot.

Under the deal — which is still subject to change — the state could collect a 17 percent tax while localities could collect up to 3 percent.

The deal to allow local taxes is aimed at ending a standoff with cities and counties over just how much power they have to prohibit retail sales of both recreational and medical marijuana.

That issue has tied up legislation that would place new limits on medical marijuana growers, which is aimed at reducing black-market diversions.

 

3 Cities Sue Adams County Over Recreational Pot Taxes

COLORADO:  Three suburban Denver cities are suing Adams County to stop it from collecting taxes from recreational marijuana businesses already being taxed by the cities and the state.

The lawsuit filed this week argues Adams County shouldn’t get tax revenue because it doesn’t have a regulatory system for recreational pot sales like the cities that are suing. The lawsuit also contends Adams County lacks legal authority to impose the tax, which voters approved in November.

Aurora, Commerce City and Northglenn filed the lawsuit. Commerce City is in Adams County, and portions of Aurora and Northglenn are as well.

An Aurora marijuana business, Terrapin Care Station, is joining the cities suing.

 

Taxes For Medical Marijuana Sales Magically Appear In House Bill 321

HAWAII:  As you might be aware, in 2000 Hawaii enacted a medical use of marijuana law (Act 228, Session Laws of Hawaii 2000). The problem, of course, has been how to get this medical marijuana to those who need

it without violating other laws. So this year our Legislature is working on House Bill 321, which would establish standards for and regulation of medical marijuana dispensaries.

The bill started off in the House and was referred to three committees there: Health, Judiciary and Finance. It passed all three and went over to the Senate. The Senate referred the bill to four committees: Health, Public Safety, Judiciary and Labor and Ways and Means.

After the first two committees, the bill was still a regulatory bill. It then was heard by Judiciary and Ways and Means committees jointly, and those committees amended the bill by, among other things, adding two sections. One creates a special general excise tax rate for retail marijuana sales. The rate is 10 percent. The other imposes a GET surcharge on the same sales. That rate is 15 percent. So here we have a magical appearing tax. Instead of a rabbit coming out of the hat, we get a new, hefty 25 percent tax.

 

Washington Lawmakers Tackle Marijuana Taxes

WASHINGTON: On the first day of the special legislative session, Washington House members took up a bill that would change the way the state taxes recreational marijuana.

Washington lawmakers are back in Olympia this week after failing to pass a two-year operating budget during the regular legislative session. Now, lawmakers have 30 days to address the operating budget, a transportation package and satisfy a court mandate to adequately fund the state’s public school system.

Also on their to-do list is cracking down on the illicit marijuana market by addressing the current tax structure.

With Oregon’s recreational market about to come online, the bill could have particular implications for border counties such as Clark County.

Rep. Reuven Carlyle, D-Seattle, chief sponsor of House Bill 2136, which passed the House in a 70-25 vote, said a lower tax rate would better align with both the black market and Oregon. Carlyle’s bill would change the tax structure to a 30 percent tax applied only at the point of sale. Currently a 25 percent tax is applied to recreational marijuana three times as it goes from grower to producer to processor.