On Wednesday, the House Ways and Means Committee voted 7-3 to advance S.54 with a 20 percent tax on all retail cannabis sales. The state tax figures align with those in Massachusetts, which set up an adult-use cannabis market in 2018, said chair Rep. Janet Ancel (D-Calais).
“We felt that 20 percent … is a good place to land,” Ancel said after the vote. “I think there might be some tolerance for it being a little bit higher than that, but not much.”
The version of the tax-and-regulate bill that passed the Senate last session would have levied a 16 percent state excise tax on marijuana sales and allowed municipal governments to charge an additional 2 percent local option tax.
The new structure now proposes a 14 percent excise tax designated for the general fund, and a 6 percent sales tax for the education fund. Based on those figures, the state could expect annual revenues from $9.1 million to $17.7 million once it is five years into the market, according to the Vermont Joint Fiscal Office.
Meantime, municipalities would not be allowed to impose their own taxes.
Explaining that decision, Ancel opined that directing taxes to the Education Fund benefits taxpayers more than allowing a patchwork of individual towns to levy their own taxes, especially considering how Vermont’s retail patterns do not “fall neatly within town lines.”
“We’re not looking at an awful lot of revenue coming in,” she added.
Removing the local option tax didn’t sit well with the Vermont League of Cities and Towns, which has previously called for rates as high as 5 percent. Karen Horn, a league lobbyist, urged lawmakers to at least allow municipalities to reap some benefits.
“We don’t believe that a 2 percent local option tax will depress retail sales of marijuana or marijuana products,” Horn said. “Nor do we believe that it will depress the revenues coming [to] the state.”
Localities and lawmakers have frequently been at odds over what a retail cannabis market should look like. Some local leaders have already passed bans on sales ahead of any anticipated legislation. Without the lure of a local option tax, Horn warned, more towns would be disinclined to allow sales.
Ancel’s committee also considered several other proposed changes to the bill on Wednesday, including one that would have required all sales tax revenues to be used only for funding K-12 education.
Rep. Cynthia Browning (D-Arlington) proposed the amendment. “If this revenue is going to be used for new programs, however worthy they may be, then there is in fact no benefit to property taxpayers,” she said.
But the committee struck down the measure, and Browning, who raised other concerns with the bill’s language, voted against advancing it. She was joined by Reps. Patrick Brennan (R-Colchester) and William Canfield (R-Fair Haven).
The bill now heads to the House Appropriations Committee, which will decide how the state should spend any cannabis-related revenues.
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A ridiculous tax at this level will only serve to ensure the black market thrives.
Leave it to the tax beavers in Monty. Working on how much tax they can charge before they have the infrastructure in place to even sell and collect.
Almost as dumb as legalizing up to an oz of weed, but prohibiting the sale of it.
If they’d jumped on the weed wagon, say 5 years ago, VT would’ve been the CO of the east!
Each year it’s not legal, the tax rate climbs. Next year it could be 25%. Agree with previous post, this will ensure a thriving black market.
Directing yet more money towards a bloated education system.
I sense that Governor Scott is checking the ink in that veto pen.
You’re going to milk the cow so hard the black market will send thank you notes.
Vermont has legalized the possession and cultivation of Cannabis, but has not yet established a system of regulation and taxation for the sale of marijuana. The supply of pot, and logically the breadth of its availability, has been increased, but the distribution is still not controlled, despite language in the statute purporting to do that. With weed grown at home, for example, kids will find it even easier to obtain than ever.
Vermont, always desperate for revenues, continues to let this rich source of politically easy taxation slip away. Consider also the jobs and tax revenues associated with businesses adding to Vermont’s status as a place of high quality specialty agriculture. And a regulated environment will reduce the participation of black market sellers, who can also offer more harmful and addictive substances, and who are often participants in organized criminal enterprises, large and small.
Granted, there is no agreement about how to detect it in a fair and legally useful manner in drivers. There remains the issue of an effective means of preventing underage distribution. But the risks and challenges of the legalization of cultivation and possession of marijuana have already been taken on by the State, and will not become more difficult with a system of regulation and taxation. So let’s reap the reward.
On the Sunset Trail to the Mansfield summit there is a jump across a little chasm two or three feet wide and about six feet deep. I hiked it with a strong and athletic friend who was afraid to make the jump. So she climbed down and climbed back up the other side, a more time consuming and messy process. Perhaps she would have been better off just jumping half way across, evaluating progress to that point, and then jumping the rest of the way.
Mr. Ed,
I was with you all through your lengthy 1st paragraph.
Ya lost me on the 2nd. Got a good lead on some high quality stuff? 😁