Oregon Considers 20% Sales Tax on Recreational Marijuana

SALEM, OR — The Oregon Legislature is considering imposing up to a 20 percent sales tax on retail sales of marijuana once it becomes available to consumers.

Proposed amendments to a bill (HB 2041) allowing localities to prohibit marijuana facilities within 1,000 feet of schools would impose a 17 percent state tax on retail sales of marijuana products, from buds to candies.

The latest amendments to the main bill (HB 3400) laying out regulations for legal marijuana in Oregon under the ballot measure enacted by voters last fall would allow cities and counties to charge a 3 percent tax, if local voters approve.

Scott Winkels, lobbyist for the League of Oregon Cities, said they were happy the Legislature gave localities authority to charge a tax – Measure 91 gave only the state authority to tax, with some of the revenues shared with localities – but the league would like to see the amount increased once retail marijuana is up and running and there is a better idea of how much revenue it is generating.

“But having it on the books, we think, is a huge win,” he said.

The sales taxes would take the place of taxes imposed on growers under the original terms of Measure 91.

Since Measure 91 passed last November making marijuana legal for recreational purposes, the Legislature has been working on changing some key provisions. The sales tax was settled on as a way to allow medical marijuana growers to grow for retail sales without having to pay the tax at the production level included in Measured 91.

There has been no analysis of how much the tax might generate, said Rob Patridge, chairman of the Oregon Liquor Control Commission, which oversees the recreational marijuana industry.

Meanwhile, a delegation of business owners from the Oregon Cannabis Association was in Washington, D.C., lobbying members of Congress to ease federal banking laws so banks could provide financial services for marijuana growers, processers and sellers, who now have to deal in cash because marijuana remains an illegal drug under federal law.

Medical marijuana patients would not be charged the tax. But they still have to get a doctor’s referral and pay $200 a year for a patient card. Depending on how much marijuana they consume in a year, that could be more or less than the tax.

By comparison, the tax on cigarettes is 65 percent of wholesale, and liquor is about 100 percent of wholesale.

Lawmakers have said they hope to have a finished bill they can vote on next week. Final details would be filled in by the Oregon Liquor Control Commission.

The initial phase of Measure 91 goes into effect July 1, when anyone over 21 will be able to grow and possess small amounts of marijuana.

There has been some support in the legislature for allowing existing medical marijuana dispensaries to start selling marijuana for recreational use as early as Oct. 1, but that has been opposed by Patridge, who says it would draw cannabis away from medical patients and allow black market marijuana to be sold under state authorization, because seed to sale tracking won’t be in place until late next year.

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