Although recreational marijuana is legal in 10 states and the District of Columbia, this plant-based product has been federally illegal since 1937. However, with recent legislation at a state level decriminalizing it and legalization quickly spreading throughout the country, we should expect more dispensaries to open their doors.
The “california dispensary sales tax calculator 2021” is a tool that allows users to calculate the amount of taxes they will pay on their cannabis purchases. This article will show you which states have the lowest taxes.
In the last several years, the cannabis business has gone from nascent to thriving. To far, recreational cannabis sales are legal in 18 states (plus Washington, D.C.), and Americans spent more than $18 billion on legal marijuana in 2020, a 71 percent increase from the previous year.
However, if you’re thinking of joining the green revolution, bear in mind that cannabis isn’t like other businesses (at least, not yet.) Because cannabis is illegal on the federal level, state-by-state laws on its sale differ greatly. If you’re a cannabis business owner looking for a place to call home, it’s essential to look into the laws in each state where marijuana is legal.
Taxes are an important factor to consider. Marijuana sales taxes have been a major incentive for states to legalize it (especially when the economy rebounds from COVID-19), and each state taxes the commodity differently according on their objectives.
According to a study published this year by the Chamber of Commerce, the two states with the lowest taxes on cannabis shops are Michigan, which has a 10% sales tax and no other taxes, and Massachusetts, which has a 10.75 percent sales tax and no other taxes.
The straightforward structure of cannabis taxes in these states, according to Olivia Thomson, a spokeswoman for the Chamber of Commerce, may also make it simpler for cannabis companies to flourish.
“You may net more profit per transaction in Massachusetts and Michigan because of their simple tax system and, in certain instances, the greater cost to the customer in these states. Other variables, such as market saturation and local demand, come into play when running a company, but these states are the simplest in terms of tax cost and structure.”
The Chamber of Commerce reports the states with the highest taxes on cannabis are Washington, with a 35% sales tax, California, with a 15% sales tax and additional weight-based taxes on cannabis products ($9.65/oz. for flower, $2.87/oz. for leaves cultivation tax, and $1.35/oz for cannabis plant,) Colorado, with a 15% sales tax and a 15% excise tax (i.e. an additional tax specific to cannabis products,) and Nevada, with a 10% sales tax and a 15% excise tax.
Clearly, there are many different points of view on how governments should tax cannabis. But here’s where things get a little trickier: According to Thomson, high cannabis taxes in certain states don’t always indicate the state isn’t friendly to dispensaries and other cannabis companies. On the contrary, several states, like as Colorado, are utilizing tax money to assist the federal government in providing greater support for the sector.
“While states like California have significant and more onerous regulatory hurdles to entry, Colorado has been aggressively embracing and developing its cannabis industry, despite its comparatively higher taxes,” Thomson added. “Given Colorado’s lengthy experience with cannabis companies, despite its comparatively higher taxation, it seems to be one of the more favorable states in the US for establishing a cannabis business.”
For instance, Thomson said that Colorado has established the Cannabis Business Office, or “CBO,” with the goal of “creating new economic development possibilities, local job creation, and community growth for Colorado’s varied population.” Colorado’s increased cannabis taxes go to a Marijuana Tax Cash Fund, which is intended to assist projects like this one.
“Dispensary taxes are important, but they should not be the main deciding factor if you are choosing where to launch your business,” Thomson said. “As mentioned earlier, it is because of the slightly higher taxes in Colorado that industry-expanding initiatives like the CBO are possible. Nevertheless, certain states are charging too high of a price with no justification.”
“Medical vs recreational tax illinois” is a question that has been asked by many people. It’s important to know how much taxes you will be paying on your cannabis before opening up a dispensary. Reference: medical vs recreational tax illinois.
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