Oregon: Tax Windfall In Month 1 of Sales Tax

Oregon Live. com reports…

Oregon collected $3.48 million in taxes from recreational marijuana sales in January, far outpacing estimates and offering the first look at how much pot is moving through the state’s newly regulated retail market.

Oregon dispensaries sold at least $14 million worth of recreational marijuana in January alone. That figure doesn’t take into account medical marijuana sales, which remain untaxed.

The collections for a single month exceed state economists’ projections for the entire year. Officials expected between $2 million to $3 million after the state paid for the costs associated with regulation.

Mazen Malik, a senior economist with Oregon’s Legislative Revenue Office, called the first round of marijuana tax collections “healthy,” but cautioned that sales may fluctuate as will the tax rate. The state also hasn’t calculated the expense of regulating the new market.

“It’s something that probably says there is a high level of compliance and that consumers are choosing to go to the legal establishment and more and more of them are leaving what we term as a gray or black market,” said Malik.

The Oregon Department of Revenue released the figures Thursday, saying it collected the January taxes from 253 dispensaries between Feb. 1 and March 4.

The number of dispensaries that paid the tax is lower than the 309 registered with the Oregon Health Authority.

The Revenue Department is contacting dispensaries that didn’t make a tax payment to “make sure they are aware of the requirement to file and pay,” said spokeswoman Joy Krawczyk.

…/…

Dispensaries are required to file a tax return every quarter, but they must make payments each month, Krawczyk said. The monthly payment requirement stems from concerns about dispensaries keeping too much cash on hand, she said.

The agency plans to audit tax returns to ensure dispensaries are paying what they owe, Krawczyk said.

Dispensaries that don’t pay their taxes face the same penalty as other delinquent taxpayers: 5 percent of what they owe would be tacked onto their bill.

By law, dispensaries are allowed to keep 2 percent of the tax to offset the costs related to collection. The Revenue Department also keeps some to cover the cost of administering the tax. The liquor commission, too, gets some to pay for the expense of regulating the market.

After that, the law says 40 percent goes to the state’s Common School Fund, 20 percent to mental health, alcoholism and drug services, 15 percent to Oregon State Police, 10 percent for city law enforcement, 10 percent for county law enforcement and 5 percent to the Oregon Health Authority for alcohol and drug abuse prevention, early intervention and treatment services.

The 19 counties and 80 cities that have opted out of recreational marijuana sales don’t get a share of the tax revenue.

Full Report:  http://www.oregonlive.com/marijuana/index.ssf/2016/03/first_month_of_taxed_recreatio.html

Primary Sponsor

 


Karma Koala Podcast

Top Marijuana Blog