Link to Owner Dr. Robert B. Pamplin Jr.

FONT

MORE STORIES


The Oregon Department of Revenue is preparing to accept large amounts of cash from legal recreational pot businesses in 2016, when a state sales tax on the drug takes effect.


Spokeswoman Joy P. Krawczyk said the agency will collect the taxes on a quarterly basis, and revenue officials plan to release details in the next couple of weeks on how they will handle the tax payments.

“It’s still really early in the process, and our special programs folks are working on putting together a solid plan,” Krawczyk said.

Marijuana taxes are projected to total $10.7 million in the fiscal year beginning July 2016.

Marijuana businesses typically operate on a cash basis because banks are unwilling to provide accounts to the cannabis industry. The U.S. Department of the Treasury issued guidance to banks in 2014 that they could do business with state-sanctioned marijuana businesses, but future presidential administrations could reverse that policy and the burden is still on financial institutions to report suspicious activities such as drug trafficking.

“The banks are worried about jeopardizing their federal charter because the feds still consider marijuana to be illegal,” said Tom Towslee, a spokesman for the Oregon Liquor Control Commission, which will implement Oregon’s new recreational pot regulations.

Although Oregon’s 17 percent sales tax on recreational marijuana takes effect in January, it’s likely that consumers initially will pay a higher rate. That is because state-licensed recreational pot retailers expect to open in late 2016, and the Legislature passed a higher tax rate — 25 percent — on medical marijuana dispensary sales to recreational customers.

That tax also takes effect in January so consumers will have a short window to buy limited amounts of tax-free recreational pot from medical marijuana dispensaries starting Oct. 1. Although all adults in Oregon age 21 and older can now possess marijuana, there is currently no legal outlet where people can buy the drug.

During a hearing in May, Department of Revenue legislative coordinator Deanna Mack told lawmakers it would be challenging for the agency to handle the cash payments. Mack said Oregon could follow the example of Washington, where recreational cannabis businesses can pay their taxes in cash at the state capital.

“We figure we’d do something like what Washington is doing, requiring them to bring the cash to Olympia,” Mack said. “My understanding is even to secure the premises will take a couple months with contractors.”

Mack said the state also could install drop boxes around the state for pot businesses to deposit cash tax payments, if business owners or employees cannot travel to Salem.

Towslee said the Oregon Liquor Control Commission does not plan to accept large amounts of cash.

“The really large amounts of cash are going to be collected in taxes,” Towslee said. Cannabis businesses will have to pay the commission’s application and licensing fees, but “both of those are handled online,” Towslee said. “It’s going to have to be done some way other than cash. So all the plans we had to accept large amounts of aromatic cash are off the table.”

Go to top
Template by JoomlaShine