Marijuana tax nets state $54M

Hood River tax kicks in Jan. 1

Oregon’s retail marijuana program has raked in at least $54.5 million in tax revenue since its inception, the state Department of Revenue announced Monday.

Sales, tallied in the agency’s report, came between Jan. 4 and Nov. 30.

Within the tax region that includes the Columbia Gorge, Central Oregon, and Northeast Oregon, retailers filed 23 tax returns from January to March. Businesses there sold 406,000 grams of marijuana flower (known as “bud”), totaling $3.24 million in sales.

The average price per gram in that region was $8.19, ODR reported. Establishments sold an average of 18,000 grams.

The state’s report didn’t break down districts by counties due to privacy issues that could pose, according to ODR spokesperson Joy Krawczyk.

“We’re using the regional breakdown,” Krawczyk said, “because many of the counties don’t have a high enough number of taxpayers to avoid inadvertently disclosing the confidential information marijuana retailers and dispensaries provide on their quarterly returns.”

Oregon currently has a 25 percent tax on retail marijuana, but that expires at the end of the year.

Starting Jan. 1, retail marijuana sellers will be overseen by Oregon Liquor Control Commission, with a 17 percent state tax and an optional three percent local tax — hinging on voter approval.

Medical marijuana dispensaries will fall under the jurisdiction of Oregon Health Authority after Dec. 31.

The state’s retail tax, OLCC says on its website, will go toward the Common School Fund, mental health alcoholism and drug services, and state police, as well as cities and counties that enforce the marijuana law. Tax returns are due quarterly, while tax payments are due monthly.

City and county revenue will be determined by population through July 2017. From there, it will be based on the number of licenses issued by OLCC in a given area. Areas that prohibit recreational marijuana facilities won’t receive any marijuana tax revenue.

Voters in Hood River spoke clearly in favor of a local tax during the Nov. 8 general election — by 73 percent. The local tax will be dedicated to public safety and education programs related to marijuana, details in the works.

To move the tax forward, City Council passed a follow-up ordinance at Monday’s meeting. It sets a zero percent rate for medical marijuana products — since cities have no authorities to tax them under Oregon law — and a three percent rate on recreational marijuana.

“The administration of a marijuana sales tax carries distinct challenges,” Will Norris, city financial director, said in a report.

The industry is primarily cash-based, Norris said, due to limited access to federal banking institutions. Marijuana remains a federally controlled substance, despite its legalization in certain states, such as Oregon.

The League of Oregon Cities has crafted a model agreement for cities to use. In Hood River, marijuana retailers will collect the tax from customers at the point of sale. The state will then collect the local tax on behalf of the city.

To cover staff and overhead costs, the state will deduct 4 percent of the tax proceeds as an administrative fee, Norris stated.

Hood River has five licensed marijuana shops: three downtown, one in the west Cascade business district, and one in the Heights. A sixth dispensary is planned on Westcliff Drive.

Voters in The Dalles and Mosier also passed local marijuana taxes on Nov. 8.

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