Arizona Attorney General Calls for a Tax on Medical Marijuana

Arizona Republic:  “Attorney General Tom Horne opposed a ballot measure to legalize medical marijuana  but now he’s calling for it to be taxed.  State tax collectors say that’s exactly what they plan to do.”

The Republic missed the big story on taxing medical marijuana.  On January 26, 2011, a group of legislators introduced House Bill 2557 (aka the “Don’t Divert Money from the Drug Cartels Act”) that would tax the sale of medical marijuana at the rate of 300 percent.  See “Arizona Legislators Introduce HB 2557 to Overturn Voters Approval of Proposition 203.”

By |2014-01-05T09:52:27-07:00January 28th, 2011|Tax Issues|Comments Off on Arizona Attorney General Calls for a Tax on Medical Marijuana

Arizona Legislators Introduce HB 2557 to Overturn Voters Approval of Proposition 203

The voters of Arizona spoke when a majority approved Proposition 203.  Now a group of elected elites who know what is best for the people of Arizona introduced House Bill 2557 (aka the “Don’t Divert Money from the Drug Cartels Act”) on January 26, 2011, for the sole purpose of killing Arizona’s medical marijuana industry before it begins.  Maybe the goal of the elites is to kill the dispensary industry so that under Proposition 203 nobody will live within 25 miles of a dispensary so all licensed patients can grow their own throughout the entire state.

Yesterday Arizona’s Attorney General Tom Horne issued a press release that said Arizona could impose a sales tax on medical marijuana and he estimated Arizona would collect $40 million in badly needed revenue.  If HB 2557 passes, Arizona can kiss the medical marijuana industry good bye, which means no need for the 125 would be dispensaries to hire thousands of employees, security personnel, growers, transporters and the many other types of ancillary jobs that the industry would generate.

Here is the key language in HB 2557.  It will amend Arizona Revised Statutes Section 42-5010 by adding the following as new subsection A.5 to read:

The tax imposed by this article is levied and shall be collected at the following rates:

THREE HUNDRED PER CENT OF THE TAX BASE AS COMPUTED FOR THE BUSINESS OF EVERY PERSON ENGAGING OR CONTINUING IN THIS STATE IN THE NONPROFIT MEDICAL MARIJUANA DISPENSARY CLASSIFICATION DESCRIBED IN SECTION 42-5077.

HB 2557 will add the following new section 42-5077 to Arizona’s statutes:

42-5077. Nonprofit medical marijuana dispensary classification

A.  THE NONPROFIT MEDICAL MARIJUANA DISPENSARY CLASSIFICATION IS COMPRISED OF THE BUSINESS OF SELLING OR DISPENSING MEDICAL MARIJUANA TO  QUALIFYING PATIENTS PURSUANT TO TITLE 36, CHAPTER 28.1.

B.  THE TAX BASE FOR THE NONPROFIT MEDICAL MARIJUANA DISPENSARY CLASSIFICATION IS THE GROSS PROCEEDS OR GROSS INCOME DERIVED FROM THE BUSINESS.

C.  IF A PERSON WHO IS ENGAGED IN BUSINESS AS A NONPROFIT MEDICAL MARIJUANA DISPENSARY ALSO SELLS OTHER TANGIBLE PERSONAL PROPERTY AT RETAIL, THE PERSON’S BOOKS MUST SEPARATELY ACCOUNT FOR SALES OF THE OTHER TANGIBLE PERSONAL PROPERTY, AND IF NOT SO KEPT THE TAX UNDER THIS SECTION APPLIES TO  THE TOTAL OF THE PERSON’S ENTIRE GROSS PROCEEDS OR GROSS INCOME FROM THE BUSINESS.

If you want Arizona to have legalized medical marijuana, you must tell your legislators to impose a reasonable tax on medical marijuana of 5% – 7%.  Here’s the contact information for the Arizona legislators who introduced this bill (more…)

By |2017-02-11T17:28:53-07:00January 27th, 2011|AZ Legislation, Legal Issues, Tax Issues|Comments Off on Arizona Legislators Introduce HB 2557 to Overturn Voters Approval of Proposition 203

Medical Marijuana Will be Taxed Says Arizona Attorney General Tom Horne

Here is the text of a January 26, 2011, press release by Arizona Attorney General Tom Horne:

HORNE TO RECOMMEND TAXATION OF MEDICAL MARIJUANA

Phoenix (Wednesday January 26, 2011) – Attorney General Tom Horne today announced that he is recommending to the Arizona Department of Revenue that medical marijuana, made legal in a recent initiative, be taxed by the State.

Horne stated, “I was opposed to the medical marijuana initiative during the 2010 election, but it was passed by the voters and the issue now presented is whether it should be taxed under existing law.”

He added, “Normally, there would be no tax on prescriptions. However, the legislation refers to doctors giving a ‘written certification’ rather than a prescription, an apparent effort, copied from other states, to protect doctors from discipline for giving prescriptions of substances prohibited under federal law. Since these are ‘written certifications’ rather than prescriptions, the sale of the substance can be taxed by the State, and we are recommending to the Department of Revenue that it tax the sales accordingly. We are informed by the Department of Revenue that they will take this advice, and tax the sales.”

The taxes are estimated to yield revenues to the State of Arizona in the approximate amount of $40 million per year. This number is projected, on a pro rata basis, to the Arizona population the statistics for Denver County, as reported by the Denver Post using the Phoenix sales tax rate.

By |2011-01-26T21:09:26-07:00January 26th, 2011|Legal Issues, Tax Issues|Comments Off on Medical Marijuana Will be Taxed Says Arizona Attorney General Tom Horne