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Since the day Missouri voters enthusiastically made Missouri the 20th state to legalize marijuana, we’ve been one of the most successful states in the entire country at bringing marijuana customers out of the shadows of the illicit market and into the regulated market by providing great customer service and selling high-quality products at good prices, without overly burdensome taxes. Last Oct. 1, that status as one of the lowest adult use tax states was threatened when dozens of Missouri counties began stacking an extra 3% sales tax on the sale of adult use marijuana in incorporated areas.
Only days later, Missouri’s cannabis industry filed a lawsuit to prohibit this unconstitutional tax stacking on behalf of our customers, with Robust Missouri | Feel State Dispensary being the plaintiff in the case.
Last week Missouri’s Eastern District Court of Appeals ruled that Missouri counties are prohibited from stacking these taxes and protecting Missouri’s status as one of the lowest adult use tax states in the nation. Industry attorney Eric Walter from Armstrong Teasdale conducted the oral arguments in front of the appellate panel, which delivered a unanimous ruling that has the potential to save Missouri adult use customers tens of millions annually.
Even without the unconstitutional tax stacking, Missouri cannabis sales are generating roughly $230 million annually in sales tax revenue for state and local government.
St. Charles County has told the media they plan to appeal to the Missouri Supreme Court. Although, unlike the Court of Appeals, the Supreme Court is allowed to decide whether to take the case or let last week’s ruling stand. There is also a separate case pending in front of the Western District Court of Appeals dealing with the same issue.
While we wait for the ruling to become final and to see if an appeal is granted, most Missouri dispensaries are continuing to collect the tax until the issue is completely settled. If the Supreme Court declines to accept transfer, or if it does and then later issues a decision confirming that tax-stacking is unconstitutional, a “mandate” will issue to the lower court, communicating the appellate decision and making it effective. At that point, DOR should issue new rate change notifications to the affected dispensaries, identifying the date when each should begin collecting the correct sales tax (without the unconstitutional extra county tax). Additional info available via this story from the Independent.
As in all legal matters, MoCannTrade doesn’t provide legal advice, and we’d urge you to talk with your own legal counsel about this issue if necessary.
We will keep you updated as this is a major issue we’ll continue to aggressively fight on behalf of you, your customers and the Missouri program.
