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Status of State Taxation/Sales of Marijuana
click here to View Presentations on Marijuana Taxation Issues form FTA Conferences Click on Blue/Yellow States to View Details of State Programs , or [download pdf version] Source: Federation of Tax Administrators from various sources Updated - May 27, 2022
State Marijuana/Cannabis Taxes - 2022
Alaska
Legalization was approved with Ballot Measure 2 in 2014. The first cultivation license was granted in July 2016, with retail sales beginning in October 2016 Taxes: Excise tax of $50/ounce for flowers Excise tax of $15/ounce for stems and leaves Excise tax of $25/ounce for immature flowers/buds (added 10/2018) FY 2017 Revenues $1.7 million. Agencies Administering:
AL
AK
AZ
AR
CA CO
CT
DE
DC
FL
GA
HI
ID
IL IN
IA
KS KY
LA
ME
MD
MA
MI
MN
MS
MO
MT
NV NE
NH
NJ
NM
NY
NC
ND
OH
OK
OR
PA
RI
SC
SD
TN
TX
UT
VT
VA
WA
WV
WI
WY
Licensing and Tracking: Marijuana Control Board https://www.commerce.alaska.gov/web/AMCO Tax Administration: Alaska Dept. of Revenue http://tax.alaska.gov/
Arizona
Arizona Proposition 207, Marijuana Legalization Initiative approved on 2020 Ballot [59.9% to 40.1%]. Licensing of Retail establishments began January 16, 2021 Taxes: Proposition 207 would place a 16 percent tax on marijuana sales, in addition to the existing transaction privilege tax and use tax. Agencies Administering: Arizona Department of Health Services (DHS) is responsible for adopting rules to regulate marijuana, including the licensing of marijuana retail stores, cultivation facilities, and production facilities. https://www.azdhs.gov Taxes adiministered by the Department of Revenue https://azdor.gov/
California
Legalization was approved with Proposition 64 in 2016. Personal use and growth were legal beginning in November 2016. Retail sales began January 2018 Taxes: Cultivation Tax of $9.25/ounce for flowers [$9.65 after 1/1/20] $2.75/ounce for leaves [$2.87 after 1/1/20] Fresh plant material $1.29/ounce [$1.35 after 1/1/20] Excise tax of 15% of Retail Sales State retail sales tax applies (7.25% plus local taxes) notes, medical marijuana was exempted from the state sales tax on November 2016 by Prop. 64. FY 2018 Revenues (two quarters) $134 million. Agencies Administering: Tracking and Licensing: Dept. of Cannabis Control https://cannabis.ca.gov Tax Administration: California Dept. of Tax and Fee Administration https://www.cdtfa.ca.gov/
Colorado
Legalization began when voters approved Constitutional Amendment 64 in 2012. Colorado became the first state to begin legal sales when retail stores opened in January 2014. Taxes: Excise Tax of 15% of Average Market Rate, sales to retail stores Retail Tax of 15% (10% before July 2017) - local government receive 10% of this tax. (2.9% retail sales tax before July 2017) Local Option Retail Tax up to 8%
Taxes: Illinois Dept. of Revenue Cannabis Information Page -https://www2.illinois.gov/rev/ Information bulletin 2020-
Maine
Voters approved marijuana legalization with the Ballot Question 1 in 2016. This allowed possession and individuals to grow marijuana beginning on January 30, 2017. On May 2, 2018, the Legislature overrode the Governor's veto of LD 1719, An Act to Implement a Regulatory Structure for Adult Use Marijuana. Retail sales began on October 9, 2020. Taxes: Excise tax of $335 per pound - flower Excise tax of $94 per pound - trim Excise tax of $1.50 per seedling Excise tax of $0.35 per seed Retail sales tax of 10% Agencies Administering: Tracking and Licensing: Office of Marijuana Policy - Maine Department Administrative and Financial Services https://www.maine.gov/dafs/ [draft rules released - April 23 2019] Taxes: Maine Revenue Service https://www.maine.gov/revenue/
Massachusetts
Legalization was approved with Ballot Question 4 in 2016. While the ballot question set January 2018 as the date for retail sales to begin, legislation H 3818 delayed first sales until after July 1, 2018 and set various tax rates. It also created a Cannabis Control Commission with 5 appointed members. The first cultivation license was issued on June 21, 2018, and the first retail store openned on November 20,
Taxes: 10.75% Excise Tax on Retail sales (initially 3.75% on ballot) 6.25% Retail Sales Tax applies Local Option Excise Tax of up to 3% is permitted (initially 2% on ballot) Agencies Administering: Tracking and Licensing: Massachusetts Cannabis Control Commission https://mass-cannabis-control.com/ Taxes: Massachusetts Dept. of Revenue https://www.mass.gov/marijuana-retail-taxes
Michigan
Voters recently approved Ballot Proposal 1 in the 2018 election authorizing the cultivation, distribution and retail sales of recreational Marihuana. State policymakers now need to approve legislation to implement the proposal. Details on taxes and regulation will be spelled out in future legislation. Legal retail sales began on December 6, 2019. Taxes: 10% Retail Excise Tax 6% State Sales Tax (effective February 6, 2020)
Agencies Administering: Tracking and Licensing: Michigan Dept. of Licensing and Regulatory Affairs https://www.michigan.gov/lara/0,4601,7-154-89334_79571_90056---,00.html Taxes: To Be Administered by the Michigan Department of Treasury https://www.michigan.gov/treasury The Department has recently released Bulletin 2019-17 discussing collections of retail excise tax.
Montana
Montana I-190, Marijuana Legalization and Tax Initiative approved on the 2020 ballot [56.6% to 43.4%]. Retail sales to began January 2022. Taxes: Marijuana and marijuana-infused products would be taxed at 20% of the retail price. Local option up to 3% Medical marijuana taxed at 4% of retail price Agencies Administering: The Montana Department of Revenue would be responsible for regulating the cultivation, manufacture, transport, and sale of marijuana in Montana. https://mtrevenue.gov/
Nevada
Legal sales of Marijuana were approved by the voters with Ballot Question 2 in 2016. While the Ballot Question setup January 1, 2017 as the start date for retail sales, the Dept. of Taxation approved regulations allowing sales to begin on July 1, 2017. Due to supply conditions, the Department temporarily permitted medical facilities to sell recreational marijuana. Taxes: Wholesale Excise Tax 15% [Fair Market Value determined by DOT], also applied to medical marijuana Retail Tax 10% Sales tax imposed 6.85% (plus local) Agencies Administering: Tracking, Licensing and Taxes: Nevada Dept. of Taxation http://marijuana.nv.gov/
New Mexico
The Governor recently sign HB 2 which provides for the retail sales of recreational marijuana began April 2022. Taxes: Excise tax of 12% of Retail Sales [tax rate will increase annualy beginning in 2025 to 18%] Retail sales tax applies Agencies Administering: The Cannabis Control Division (CCD) in the Regulation & Licensing Department will regulate and issue licenses for cannabis producers and retailers. https://ccd.rld.state.nm.us The Taxation and Revenue Department will collect and administer the Cannabis Excise and Gross Receipts [sales] Taxes. https://www.tax.newmexico.gov
Rhode Island
The Governor sign legislation [H 7593/S 2430] to allow the retail sales of recreational marijuana. While regulations still need to be written, retail sales are scheduled to begin December 1, 2022 Taxes: 10% Excise Tax 3% Local Excise Tax 7% State Sales Tax Agencies Administering: Tracking and Licensing: Rhode Island Cannabis Control Commission (to be created) Taxes: Rhode Island Division of Taxation https://tax.ri.gov
South Dakota
South Dakota Constitutional Amendment A, Marijuana Legalization Initiative was approved on the 2020 ballot [53.4% to 46.6%]. NOTE: Constitutional Amendment A was declared invalid on November 24, 2021. A separate provision for Medical Marijuana Legalization still goes into effect. The amendment would require the South Dakota State Legislature to pass laws providing for a program for medical marijuana and the sale of hemp by April 1, 2022. Taxes: Under the amendment, marijuana sales would be taxed at 15%. After the tax revenue is used by the Revenue Department to cover costs associated with implementing the amendment, 50% of the remaining revenue would be appropriated to fund state public schools and 50% would be deposited in the state's general fund. https://dor.sd.gov
Vermont
In September, the legislature approved S. 54. If signed by the governor, this bill would authorize Retail Sales of recreational marijuana begining October 1, 2022. The provisions of S. 54 are below. Taxes Cannabis Excise Tax - 14% of Retail Price State Sales Tax Agencies Administering: Licensing: Cannabis Control Board (CCB), https://ccb.vermont.gov Taxes: Department of Taxes [https://tax.vermont.gov] Vermont Cannabis Tax Guide [April 2022] Previous Actions: In January 2018, the governor signed H. 511 permitting the possession of 1 ounce of marijuana and two plants. It did NOT allow the retail sales of marijuana but created a Marijuana Advisory Commission which would submit recommendations to the legislature on future retail sales. Agencies Administering: Vermont Marijuana Advisory Commission https://marijuanacommission.vermont.gov/
Virginia
The legislature approved and the governor signed SB 1406 [HB 2312] which legalizes possession and allows for the retail sales of Marijuana. Legal possession of of one ounce or less will be allowed July 1, 2021, while retail sales will begin January 1, 2024. Taxes: Retail sales tax of 21% for all products sold through Marijuana stores a 3% local options sales tax may also apply Agencies Administering: Virginia Cannabis Control Authority https://www.cannabis.virginia.gov
Washington
Voters approved Measure Initiative 502 in 2012 which legalized the possession, distribution and sales of marijuana. It required the State Liquor Control Board to regulate and tax the retail sale of Marijuana. Legislation in 2015 (H 2136) changed the tax rate (from 25% wholesale and retail tax) to the current 37% rate and changed the name to the Washington State Liquor and Cannibas Board. Retail sales began July 2014, with Washington became the second state to permit retail sales of recreational marijuana. Note, medical dispensaries were required to obtain a retail license after June 2016. Taxes: 37% Tax on Retail Sales 6.5% Retail Sales Tax (plus local tax) [medical is exempt from sales taxes after June 2016] Agencies Administering: Tracking, Licensing and Taxes: Washington State Liquor and Canabis Board https://lcb.wa.gov/ Information on past and future Ballot Initiatives. https://ballotpedia.org/Marijuana_on_the_ballot#By_year Return to Map View Source: Federation of Tax Administrators from various sources Updated - May 27, 2022
