BOE Finally Agrees with Advocates that Medical Marijuana Generates $100 Million Annually in Sales Tax Revenue for the State
May 6th, 2010Posted by Kris Hermes
The East Bay Express reported yesterday that the state collects up to $100 million per year from taxing the sale of medical marijuana.
California Board of Equalization official Anita Gore told the Express this week that the board estimates it collects anywhere from $50 million to more than $100 million in sales taxes per year from medical cannabis dispensaries.
Although this amount of revenue seems startlingly high, Americans for Safe Access has said for the past two years that the Board of Equalization (BOE) was collecting at least $100 million annually from hundreds of dispensaries. This figure was corroborated by California NORML, which conducted a sales tax study separately from ASA.
Certain factors may now even make the $100 million figure a low estimate. For example, when ASA conducted its sales tax study in early 2008, there were approximately 400 dispensaries in California, whereas there are now well over 1,000. Also, in August 2008, the California Attorney General issued guidelines that underscored the need for dispensaries to pay sales tax if they are to be compliant with state law. Because of the guidelines, more medical marijuana providers now know about the BOE policy and are remitting revenue to the state than ever before.
Yet, despite this high amount of revenue, many medical marijuana providers continue to be raided by local law enforcement under the pretext that sales are illegal. Routinely, District Attorneys are prosecuting cases on the argument that sales are illegal, including Los Angeles DA Steve Cooley and San Diego DA Bonnie Dumanis. Some Superior Court judges have even deemed sales to be illegal, yet the fact remains that the California legislature in 2004 exempted collectives and cooperatives from arrest and prosecution for “sales” and maintaining a place where sales occur. Furthermore, case law backs the interpretation that medical marijuana storefronts may be reimbursed for costs, amounting to sales. Several cities, including Santa Rosa, have adopted regulations licensing the “retail sale” of medical marijuana.
It’s time for the Board of Equalization to step up and defend the sale of medical marijuana, and a relatively new source of tax revenue that is making a significant investment in the state’s future.
May 7th, 2010 at 5:57 am
Is it “SALES” or is it “REIMBURSEMENT”? Those are irreconcilably different things. And taxing medicine is unconscionable either way.
May 7th, 2010 at 9:00 am
Sales can be THE method of reimbursement and those should be taxed. I understand there are other methods to reimburse, but this is the most commonly used method, this allows for the financial disbursement to one point, that takes care of all the necessary reimbursements for items necessary to procure, produce and distribute the marijuana, including sales tax. It is only taxed because this is not considered a medicine at the Federal level and because it is provided over the counter (not prescribed), it is a taxable medicine like cough drops, aspirin, Night Quil, ect.
May 19th, 2010 at 7:19 pm
my uncle got stomach ulcers because he took a lot of Aspirin to take care of his high blood pressure.:.:
June 8th, 2010 at 11:59 am
With that much revenue generated via taxation of medical use what do you think the revenues will be if MJ is fully legalized?
October 6th, 2010 at 12:47 pm
[...] growing and selling it will still be a federal crime, it has already been proven false. California collects something like $100 million in sales tax revenue from medical marijuana dispensaries every year, [...]