A new bill in Pennsylvania would tax cannabis like other legal substances. The bill is not without controversy, and opponents argue that the money will be used to fund addiction treatment while supporters say it’s a fair measure for an industry struggling with federal prohibition.
The “california medical vs recreational tax” is a new law that will go into effect on January 1st, 2018. This law will allow cannabis to be taxed differently depending on if it’s being used for medical or recreational purposes.
Even if you qualify as a patient, it may be tempting to forego a medical card in light of the fact that recreational cannabis is now available in 19 states. While recreational marijuana is legal in many places for persons of legal age, possessing a medical marijuana card and buying medical marijuana rather than recreational marijuana has certain advantages. Some jurisdictions, for example, let medical patients to buy higher strength drugs and have greater possession limitations.
Cannabis, like almost everything else, is subject to taxation. Whether you’re at a dispensary and witness someone purchasing the same product for a lesser price, you may question if medicinal and recreational marijuana are the same. Each state in the United States is in charge of levying taxes on commodities that travel inside its borders. Cannabis is no exception since its legalization! Each state’s taxation system is absolutely unique. As a result, tax rates will vary greatly throughout the nation.
- What You Should Know About Marijuana Taxes in General
- Medical Marijuana Patients Pay Taxes
- What States Have Medical Marijuana Taxes?
- Recreational Marijuana Users Pay Taxes
- How to Save Money on Medical Marijuana Purchases
- Important Points to Remember
What You Should Know About Marijuana Taxes in General
There are no universal rules on medicinal marijuana taxation since marijuana is still banned on the federal level. States and municipal governments, on the other hand, are allowed to tax green at any amount they see fit. In fact, pro-pot lobbyists often claim tax income as a justification for getting marijuana on the ballot.
Marijuana is subject to three different types of taxes:
- Excise duty
- VAT (Value Added Tax)
- Imposition of a local tax
Specific items, such as cigarettes, alcohol, or—in this case—marijuana—are subject to an excise tax. Excise taxes, which are paid in addition to municipal and sales taxes, are also referred to as “sin taxes.” Manufacturers may pay the excise tax on other items, but in the case of marijuana, most states pass the fee on to the customer.
Sales tax is a line on most receipts that is paid to states for all retail products and services (unless you live in Alaska, Delaware, Montana, New Hampshire is a state in the United States. is a state in the United States., or Oregon). The selling of marijuana is no exemption.
Special taxes levied by counties or municipalities to support particular programs are known as local taxes. Local governments in Alaska, California, Massachusetts, New York, Oregon, and Virginia may charge an extra tax on marijuana transactions. In California, for example, certain marijuana transactions are subject to excise taxes, sales taxes, and municipal business taxes ranging from 1% to 15%.
Medical Marijuana Patients Pay Taxes
While the taxman is engaged in medical marijuana transactions, these taxes are generally more lenient than recreational marijuana purchases; this means that, depending on your state, medicinal marijuana may be less expensive than recreational marijuana without sacrificing effectiveness. Medical marijuana is taxed in the following states by the consumer:
What States Have Medical Marijuana Taxes?
- Arizona: Purchases are subject to a 6.6 percent state excise tax as well as a 2-3 percent optional local municipality tax.
- Arkansas: Purchases are subject to a 6.5 percent statewide sales tax, as well as a 4 percent privilege tax and any relevant municipal taxes.
- Medical marijuana purchases in California are not subject to sales tax, but are subject to a 15% cannabis excise tax as well as municipal taxes, if applicable.
- Colorado imposes a 2.9 percent state excise tax on all sales, as well as any extra municipal taxes.
- Connecticut: Purchases are only subject to a 6.35 percent statewide retail sales tax.
- Purchases in Florida are subject to a 6% statewide retail sales tax.
- Purchases in Hawaii are subject to a 4% statewide retail sales tax, except on Oahu, where the rate is 4.5 percent.
- Purchases of qualified pharmaceuticals in Illinois are only subject to a 1% statewide sales tax. A 7% tax is also levied on sellers and farmers.
- Purchases in Iowa are subject to a 6% statewide retail sales tax as well as any extra local levies.
- Maine imposes a 5.5 percent statewide sales tax on all purchases. However, edibles, which are taxed at 8%, are an exemption.
- Purchases in Michigan are only subject to a 6% statewide sales tax.
- Purchases in Missouri are subject to a The sales tax is 4%..
- Purchases in Montana are subject to a There is a 4% excise tax..
- Nevada: Only the 4.6 percent statewide sales tax applies to purchases.
- New Jersey is a state in the United States.: Medical marijuana is now taxed at 2% in New Jersey, but the state is in the process of gradually decreasing the rate until it reaches 0% on July 1, 2022.
- Purchases in New York are subject to a 7% medical marijuana excise tax, but not to any statewide retail sales tax.
- North Dakota is a state in North America.: Purchases in North Dakota are subject to a 5% statewide sales tax.
- Ohio: Purchasers pay a 6.5 percent to 7.25 percent statewide sales tax, which varies by jurisdiction.
- Oklahoma: Purchases are subject to a 4.5 percent statewide sales tax, any relevant local municipal taxes, and a 7 percent medicinal marijuana excise tax.
- Purchases in Rhode Island is a state in the United States. are only subject to a 7% statewide sales tax.
- Washington, D.C. is the capital of the United States.: Purchases are subject to a 5.75 percent sales tax.
Medical marijuana is not taxed in the following states:
- New Hampshire
For further information, contact the department of revenue in your region.
Recreational Marijuana Users Pay Taxes
While some jurisdictions are lenient with medicinal marijuana sales, levying just sales taxes or no taxes at all, most states significantly increase the taxes on recreational marijuana sales. In Oregon, for example, where there is no statewide sales tax, recreational marijuana purchases are subject to a 17 percent cannabis excise tax and a 3% local municipal tax. Medical marijuana users in Oregon, on the other hand, pay no taxes.
Medical marijuana users in California pay a fixed There is a 15% excise tax. plus additional municipal taxes where appropriate, but the state is searching for money when it comes to recreational marijuana. Adult-use marijuana in California is subject to a 15% cannabis excise tax, as well as a 7.25 percent state retail sales tax and a 1 percent automatic municipal sales tax. Local governments may also levy extra taxes of up to 15%, bringing the total tax rate on recreational sales in California to 38%. That’s a big difference from the 15% to 20% medicinal patients pay in Florida, which might be a good incentive to acquire your medical card even if you live in a state where recreational marijuana is legal.
Check out the table below for a side-by-side comparison of medical marijuana taxation, recreational marijuana taxes, and mmj patient numbers by state.
|State||Rate of Medical Taxation||Rate of Recreational Taxation||Patient Count for Medical Marijuana|
|Alaska||0%||In certain towns, there is a 3-5 percent excise tax.||391|
|Arizona||State excise tax of 6.6 percent (2-3 percent additional taxes in some municipalities)||(5.6 percent sales tax + 16 percent excise tax) = 21.6 percent||307,975|
|Arkansas||(6.5 percent sales tax + 4% privilege tax) = 10.5 percent||N/A||76,779|
|California||Excise tax of 15% plus municipal charges||Up to 23.25 percent (15 percent excise tax + 7.25 percent sales tax + 1% local tax, before further municipal taxes of up to 15 percent)||1,920,294|
|Colorado||Excise duty of 2.9 percent||15% excise tax||87,216|
|Connecticut||The sales tax is 6.35 percent.||N/A||54,000|
|Florida||The sales tax is 6%.||N/A||561,177|
|Hawaii||4% sales tax||N/A||32,801|
|Illinois||On eligible pharmaceuticals, there is a 1% statewide sales tax.||6.25 percent sales tax plus up to 25% depending on the amount of THC in the product||156,224|
|Iowa||The sales tax is 6%.||N/A||This item is currently unavailable.|
|Maine||Sales tax of 5.5 percent (edibles are taxed at 8 percent )||10 percent excise tax + 5.5 percent sales tax = 15.5 percent||65,368|
|Massachusetts||0%||10% (10.75 percent excise tax + 7.25 percent sales tax) plus up to 3% in local taxes||69,008|
|Michigan||The sales tax is 6%.||10 percent excise tax + 6% sales tax = 16 percent||250,805|
|Montana||4% excise tax||There is a 20% excise tax (proposed)||40,972|
|Nevada||Sales tax of 4.6 percent||10% excise tax + 4.6 percent sales tax = 14.6 percent||13,862|
|New Jersey||2 percentage points (0 percent after July 2022)||The sales tax is 6.625 percent (proposed)||104,523|
|New Mexico is located in the United States.||Dispensaries are obliged to pay a gross receipts tax, which ranges from 5.125 percent to 8.8125 percent depending on where they are located in the state. Some shops may opt to pass this fee on to patients.||N/A||112,183|
|New York||The excise duty is 7%.||Taxes on recreational marijuana purchases have yet to be set.||151,355|
|North Dakota||5% VAT on purchases||N/A||5,392|
|Ohio||Sales tax ranges from 6.5 percent to 7.25 percent, depending on the jurisdiction.||N/A||186,590|
|Oklahoma||7 percent excise tax + 4.5 percent sales tax = 11.5 percent||368,218|
|Oregon||0%||20 percent (17 percent excise tax + 3% municipal tax)||22,566|
|Rhode Island||The sales tax is 7%.||N/A||19,401|
|South Dakota is located in the United States.||0%||19.5 percentage point (proposed)||This item is currently unavailable.|
|Vermont||0%||a total of 20% (14 percent excise tax + 6% sales tax)||5,209|
|Virginia||0%||26.3 percentage point (proposed)||This item is currently unavailable.|
|Washington||0%||The excise duty is 37%.||52,479|
|Washington, D.C.||The sales tax is 5.75 percent.||Adult usage sales are not permitted (adult use consumption is legal)||9,276|
|West Virginia is a state in the US.||zero percent (dispensaries pay 10 percent on gross receipts)||N/A||This item is currently unavailable.|
How to Save Money on Medical Marijuana Purchases
Marijuana has a lot of advantages, but it might be expensive depending on where you reside. There are a few strategies to prevent cannabis from breaking the budget if you want to enjoy its benefits, which include increased relaxation, reduced anxiety, and pain relief.
Become a Patient of Medical Marijuana
The price gap between medicinal and recreational cannabis, as we’ve seen, may be significant. You may be eligible to become a medical marijuana patient depending on your state. Finding a doctor to help you find relief used to be a nightmare of shady office visits and word-of-mouth, but now Veriheal can help you identify registered physicians in your state who can chat about how marijuana may treat your symptoms and assist you obtain the necessary paperwork. Find out how Veriheal may assist you in becoming a medical patient.
Grow Cannabis on Your Own
Growing marijuana for personal use is a viable alternative for people who want to save money up front yet have the time and energy to commit to a temperamental plant. If you routinely use cannabis, being an at-home grower may provide you with more variety, save you money, and provide you with a fun pastime. MMJ cardholders are permitted to cultivate more plants than recreational users in several states.
Important Points to Remember
While marijuana prices vary greatly from state to state, medicinal marijuana is virtually always cheaper owing to reduced taxes in jurisdictions where both recreational and medical cannabis are permitted. Contact Veriheal if you’re interested in cannabis treatment or becoming a medical patient. We’ll show you the way and assist you in getting started.
Emily Overholt is a writer and editor who has long been interested in the political and personal implications of marijuana. She often examines the intersections of cannabis, commerce, politics, and personal narratives. She may be found pampering her pets when she is not online.
Cannabis taxes are a hot topic in the United States, with many states opting to tax cannabis based on its medical value. The “illinois recreational tax calculator” can help you find out how much your state will charge for recreational use.
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