Taxation Rate On Cannabis Industry
With the instantaneous rise in the popularity of marijuana, more and more people are looking into starting a “cannabusiness.” Under Federal Law, marijuana utilization remains illegal, but states who legalized the plant require businesses to pay taxes based on gross incomes.
If you’re looking into the possibility of starting a marijuana business, it’s essential to know about the tax rates that the government imposes on the industry. Also, it would be best to obtain legitimate and high-quality strains to avoid any legal trouble. Learn more at Weekend Gardener regarding the different types and additional information on cannabis growth.
In Terms Of Revenue, How Much Does The Government Take From Marijuana Businesses?
Both the state and local government taxes cannabis in seven states: Washington, Massachusetts, Oregon, Alaska, Nevada, California, and Colorado. In states Washington and Colorado, both have taxed marijuana since the year 2014, and there are millions of dollars collected per annum, which comes from the state’s own-source general revenue. Using the same source as Washington and Colorado, the state of Nevada had amassed a whopping $70 million in their first year since cannabis legalization. Alaska has a record of $10 million per annum, while Oregon has $80 million, both of which are lower compared to the previously mentioned states. On the other hand, both Massachusetts and California started taxing marijuana for less than 12 months. Although places like Vermont and Maine have legalized weed, neither have imposed taxation.
How Do Taxations Differ In Each State?
Overall, taxation prices depend on each state, from as low as 10% (Alaska) up to 37% (Washington). Also, there are tax laws that require customers to pay taxes on marijuana purchases, and afterward, the seller submits these payments to the state (Colorado, Massachusetts, California). To give a better understanding of how much each place imposes tax rates, below is a table of taxation costs:
|State||Tax on flowers||Tax on trims||Excise and sales tax|
|Washington State||–||–||37% (state sales)|
|Nevada||–||–||15% on sales (from grower to retailer), 10% (retail sales)|
|Colorado||–||–||15% on sales (from grower to retailer), 15% (retail sales)|
|Massachusetts||–||–||10.75% (state excise), 3% (local sales tax)|
|Oregon||–||–||17% (state excise), 3% (local sales)|
Where Do These Cannabis Taxes Go?
Urban Institute, together with Brookings Institution, handle and report information regarding where some of the marijuana taxes go. According to the Tax Policy Center, here are the causes that each state donate a portion of the fees:
- Oregon donates marijuana taxes to causes that support and help drug-related issues such as treatment centers and prevention programs. Also, some taxes go to their local governments.
- California focuses on legalization expenses as well as funding for studies about the development of the economy. Also, another portion goes to programs for youth and academic studies.
- Colorado provides educational support.
- Alaska cuts the taxes in half and gives 50% to the state’s general fund while the other 50% goes to causes that support or help reduce crime rates.
- Massachusetts donates to different programs that support public safety.
- Nevada chooses to save some of the taxes as part of the “rainy day fund” while also giving to programs that support education and learning.
- Washington State donates taxes to all healthcare-related organizations and causes.
Overall, Are The Taxes Fair And Acceptable?
Yes. As mentioned earlier, each state has its own set of rules regarding the amount of taxes they obtain from the cannabis industry. However, take note that these taxes aid various programs and organizations that contribute to the state’s overall improvement and development. While some states still don’t have fees or are still against the legalization of marijuana, it’s clear that tax rates are reasonably priced, and at the same time, contribute to a population in terms of education, crime reduction, healthcare, and many more.
Hits: 54https://farmerstrend.co.ke/taxation-rate-on-cannabis-industry/https://i2.wp.com/farmerstrend.co.ke/wp-content/uploads/2020/06/white-widow-marijuana.jpg?fit=750%2C375&ssl=1https://i2.wp.com/farmerstrend.co.ke/wp-content/uploads/2020/06/white-widow-marijuana.jpg?resize=150%2C150&ssl=1Around the WorldWith the instantaneous rise in the popularity of marijuana, more and more people are looking into starting a “cannabusiness.” Under Federal Law, marijuana utilization remains illegal, but states who legalized the plant require businesses to pay taxes based on gross incomes. If you’re looking into the possibility of starting a...#FarmersTrendJohn Bujufarmerstrend@gmail.comAdministratorI am a web enthusiast, writer and blogger. I always strive to be passionate about my work. I started my work at the beginning of 2013 by engaging myself with detail reading and exchanging information regarding farming with others. Since then things and times have changed, but one thing remains the same and that is my passion for helping and educating Kenyan farmers, building a successful blog and delivering quality content to the readers. The particular interests that brought me in the world of blogging are gardening, farming and livestock.Farmers#Trend