Ballot question calls for lower pot taxes than other

states
Matthew J. Lee/ The Boston Globe

By
BOB SALSBERG
AP,
September 17, 2016

BOSTON (AP) Massachusetts could not be accused of being Taxachusetts, at

least when it comes to taxing marijuana, if Question 4 on the November ballot passes.
The proposal to legalize small amounts of recreational marijuana for adults calls for a
tax rate on pot sales that would be lower considerably lower in some cases than
states that have previously legalized the drug. Critics argue the tax structure envisioned
may not generate enough revenue to cover the regulatory and enforcement costs
associated with marijuana legalization.
Question 4 calls for a 3.75 percent excise tax on retail recreational marijuana sales
assessed on top of the states regular 6.25 percent sales tax effectively creating a
10 percent tax for consumers. Cities and towns would have the option of assessing an
additional tax of up 2 percent on sales within their communities.
A DV E RT IS EM E NT
By contrast, Colorado currently imposes a 10 percent sales tax on marijuana products
on top of the states normal 2.9 percent sales tax, along with a 15 percent excise tax on
wholesale prices and local sales taxes (3.5 percent in the city of Denver).
Washington has a 37 percent excise tax on marijuana sales, while Oregon assesses a
25 percent excise tax with local communities allowed to tack on another 2 percent.
We want the tax to be low enough to be able to fund the regulation and the
administration of the initiative, but also to undercut the illicit market, said Jim

Borghesani, a spokesman for Campaign to Regulate Marijuana Like Alcohol, the group
sponsoring the Massachusetts ballot question.
By keeping taxes low, more users will opt to buy pot from legal distributors instead of
the black market, Borghesani argued. He also noted that Colorado and Oregon have
recently moved to lower marijuana taxes: Colorados sales tax will drop to 8 percent
next year while Oregons excise tax is scheduled to go to 17 percent.
State Sen. Jason Lewis is among those who believe the proposed tax rate in
Massachusetts is too low.
Any claims that this ballot question would be a revenue generator for the
Commonwealth would be fools gold. Its fools gold because at this tax rate it may not
even cover the full cost of regulating the industry, said the Winchester Democrat, who
led a delegation of state senators that visited Colorado in January to study the impacts
of legal marijuana. Lewis later announced his opposition to the ballot initiative and is on
the steering committee of the anti-legalization group Campaign for a Safe and Healthy
Massachusetts.
A DV E RT IS EM E NT
The Special Senate Committee on Marijuana has suggested a marijuana-specific sales
tax from 10 percent to 20 percent, an excise tax on marijuana growers of between 5
and 15 percent, and a local options tax of up to 5 percent.
Opponents of the ballot question are exaggerating what it would cost to fund the
Cannabis Control Commission, which under the proposal would oversee regulation of
recreational pot, Borghesani said.
Beau Kilmer, co-director of the RAND Drug Policy Research Center, said marijuana tax
policy is still evolving as more states weigh legalization, and its difficult to project how
sales and revenue will play out.
States should also carefully consider how the drug itself should be taxed, he said, with
options including sales price, weight or even concentration of THC, the psychoactive
chemical in marijuana.

If this passes in Massachusetts, the Legislature is going to want to have some serious
discussion about marijuana taxes as soon as possible, said Kilmer, who has advised
other states on issues surrounding legalization but takes no position on Question 4.
They are going to want to think through what they want the taxes to be now and also
begin to think about what the taxes might look like over time.
Framers of the ballot initiative appear to have recognized this possibility, as Question 4,
if approved, would allow the Cannabis Control Commission to review taxes on an
annual basis and if needed make recommendations to the Legislature for change. But
raising taxes once the law is in place could be a politically daunting task, Lewis
contends.
TOPICS: Local News Massachusetts