New Jersey has reduced the sales tax imposed on medical marijuana sales in the state, as part of its move to phase out medical marijuana sales tax over a three-year period.
The New Jersey Treasury Division of Taxation said that beginning July 1, 2020, it has reduced the tax on medical marijuana sales in the state to 4 percent on sales made between July 1, 2020 and June 30, 2021. Previously, the tax rate was 6.625 percent.
The tax rate will be further reduced to 2 percent on sales made between July 1, 2021, and June 30, 2022. Effective July 1, 2022, medical marijuana sales in the state will not be taxed and will be entirely eliminated.
The elimination of sales tax on medical marijuana sales in the state comes after the Jake Honig Compassionate Use Medical Cannabis Act was signed into law by New Jersey Governor Phil Murphy in July last year.
At that time, the governor noted that unlike most forms of medicine, medical marijuana in the state was subject to sales tax and the bill would phase out the sales tax over a period of three years.
Governor Murphy said that the legislation was expected to dramatically reform New Jersey’s Medicinal Marijuana Program or MMP and expand patient access to medical marijuana.
The bill created a Cannabis Regulatory Commission in the New Jersey Department of the Treasury to assume responsibility over the state’s medical marijuana program. It also raised the monthly limit on medical marijuana patients from two ounces to three ounces for a period of eighteen months.
Further, the bill authorized health care practitioners in the state to issue up to a one-year supply to their patients, compared to a 90-day supply earlier.
