Taxed Marijuana would bring $1.4 billion to California
Written by Janet
The bill to tax and regulate marijuana in California like alcohol could possibly bring in $1.4 billion in revenue for the cash-strapped state, according to an official analysis released Wednesday by tax officials. The State Board of Equalization report estimates marijuana retail sales would bring $990 million from a $50-per-ounce fee and $392 million in sales taxes.
San Francisco Democratic Assemblyman Tom Ammiano, introduced the bill in February, would allow adults 21 and older to legally possess, grow and sell marijuana. Ammiano has promoted the bill as a way to help bridge the state’s $26.3 billion budget shortfall.
Ammiano said in a statement that taxing marijuana would mean there would be no reason then to close state parks or eliminating vital services for the poor. One slight catch – the way the bill is written, the state could not begin collecting taxes until the federal government legalizes marijuana. Ammiano plans to amend the bill to remove that provision.
Here’s how the legislation would work – The legislation requires all revenue generated by the $50-per-ounce fee to be used for drug education and rehabilitation programs. The state’s 9 percent sales tax would be applied to retail sales, while the fee would likely be charged at the wholesale level and built into the retail price.
The Equalization Board used law enforcement and academic studies to calculate that about 16 million ounces — or 500 tons — of marijuana are consumed in California each year. The board also said that marijuana use would probably increase by 30%, because of the falling prices.
Estimates of marijuana use, cultivation and sales are notoriously difficult to come by because of the drug’s status as a black-market substance. Calculations by marijuana advocates and law enforcement officials often differ widely. Advocates and opponents do agree that California is by far the country’s top pot-producing state. Last year law enforcement agencies in California seized nearly 5.3 million plants.
If Ammiano’s bill passes, it could increase the tension between the state and the U.S. government over marijuana, which is banned outright under federal law. The two sides have clashed often since state voters passed a ballot measure in 1996 legalizing marijuana for medical use.
At the same time, some medical marijuana dispensary operators in the state have said they are less fearful of federal raids since U.S. Attorney General Eric Holder said the Justice Department would defer to state marijuana regulations.
Ammiano’s bill is still in committee. Hearings on the legislation are expected this fall. Also Wednesday, three Los Angeles City Council members proposed taxing medical marijuana to help close the city’s budget gap. Meanwhile, marijuana supporters have taken the first official step toward putting the legalization question directly to California voters.
- Posted in: Drug Laws & Facts
- Tagged: $1.4 billion in taxes, legal in California, Marijuana
Newsdesk International 
Legalizing pot faces serious political obstacles, but do not let that keep you from helping the state out. It might happen but why wait? For those who endorse legalizing pot to tax it as a means by which to help ease California’s budget problems, take responsibility for your self and simply voluntarily pay the tax you owe.
For California (illegal) pot smokers, simply declare on your annual tax return that you purchased X dollars of pot in the prior year, multiply that dollar amount by your local tax rate, where I live its 9.25%, and add it to your tax liability. Come to think of it, this would work regardless of the illegal drug used – cocaine, methamphetamine, extasy, LSD, heroin, etc. Remember though, California is broke so be honest about the amount of illegal drugs you buy.
We don’t need more unnecessary laws; we just need to enforce the laws that are already on the books.
Pot is already taxed in California. Like every other state I know, California has both a sales and a use tax. The sales tax is reported and remitted by retailers while the consumer reports and pays the use tax. So when illegal drug users buy dope and don’t pay either a sales or a use tax, they are not only contributing to death and violence such as is going on in Mexico right now, but they are also tax cheats; cheating California out of tax revenues it needs to keep nurses, teachers, police, firefighters, park rangers and tax collectors, on the job.
Join ranks with medicinal pot users who already pay sales tax. You don’t need the cowards in Sacramento to legalize your drug addictions to pay the tax you owe, just declare your usage on your tax return.
Take a page from the Gay & Lesbian community and come out of your closet. Do it for the kids.
California’s $1.4 Billion Pot Tax Hopes May Be Up in Smoke
With its state parks and summer schools on the chopping block, budget-busted California could see a $1.4 billion windfall if it legalizes and taxes the sale of marijuana, the state tax board found in an analysis that was published last week.
But a close look at that $1.4 billion figure raises a timely and important question:
What in blazes were they smoking?
To reach that amount, the board apparently relied on a source that relied on a source that misquoted a book that misquoted a study, all involving a hazy mix of out-of-date numbers, high margins of error and complete guesswork that could be a mere $700 million off the mark.
California’s Board of Equalization published its much ballyhooed analysis last week of a bill that would tax pot like alcohol and also levy an extra $50 fee on every ounce (which already costs about $400), a green godsend the bill’s sponsor says the state can’t afford to pass on.
“It defies reason to propose closing parks and eliminating vital services for the poor while this potential revenue is available,” State Assemblyman Tom Ammiano said in a statement.
According to the tax commission’s report, Californians consume 16 million ounces of pot every year — 1 million pounds exactly — a suspiciously round number the report said was derived from a “literature review” of “law enforcement and academic studies.”
That number would go up even more, it said, if prices dropped by half as the drug became legal.
But FOXNews.com took a close look at the board’s analysis and found a $700 million kink in its accounting.
The board appears to have based its 16-million-ounce guess on a problematic “study” conducted by the founder of a pot-growing university in Oakland and by the director of California’s branch of NORML, the National Organization for the Reform of Marijuana Laws.
But the fact is, no one — not even law enforcement agencies — really knows how much weed gets smoked in California, because self-reported users can and do lie on government surveys.
Drug Enforcement Administration agents in California said they “don’t really track users,” the Drug Czar’s office said it doesn’t follow the amount of pot consumed, and the California Highway Patrol said they “do not have those types of statistics.”
So how did California’s figures get so . . . high?
A spokeswoman for the tax board told FOXNews.com that the board calculated its $1.4 billion guesstimate based on four publications, a story on CNBC, some unnamed “Harvard studies” and Internet searches.
But the spokeswoman named only one source that addresses hard consumption in California: a 3-year-old financial report to Oakland’s medicinal marijuana oversight committee, the one that was composed by Professor Pot and the state’s director of NORML — two staunch advocates of legalization.
The report offers an estimate of how much marijuana Californians smoke in one year: 16 million ounces exactly — the same even number the state board is using.
But that 16 million ounce figure — the heart of the matter — was clipped verbatim from another report prepared by NORML that has been online in the same form for at least six years.
But after only a quick look, those numbers went up in smoke. The NORML report based some of its figures on a book called “The Science of Marijuana,” which in turn appears to have misquoted an annual study of regular smokers conducted at music festivals and pot rallies in Britain.
The book says the study found that daily marijuana users smoke about 2 ounces a month (56 grams), but the study actually found that they used just over an ounce a month (34.25 grams).
NORML’s numbers, which seemingly became the state’s numbers, are really a composite formed from the product of several old studies that measured the number of Californians who smoked in the last month, who smoke daily, the average amount a “daily smoker” smokes, the average amount a “regular smoker” tokes and a guess at how much everyone else is using.
According to national numbers from the National Survey on Drug Use & Health, there are now more people smoking month by month than when NORML ran their numbers. But in referring to the British study, they essentially tripled the amounts that regular users consume on a monthly basis. Also, fewer smokers indulge daily than NORML thought.
And a few grams here and there really add up: Using the same essential equation produced by NORML but updating the numbers with data from the U.S. government’s most recent national survey and the real figures from the British study, FOXNews.com found pot consumption to be about half of NORML’s estimate — between 8 and 10 million ounces a year.
That number still relies on guesswork and is cobbled together from British and U.S. government estimates of self-reported data from different years — a hodgepodge mix just like NORML’s debunked number.
But the California state estimate doesn’t factor in at all a continuing black market for untaxed marijuana that, without the extra fees, might cost $1,000 less a pound. And as the analysis does note, the law “would incur substantial administrative costs” for the tax board and would actually kill other tax revenue the state already earns from cigarettes and alcohol as citizens steer their money toward pot.
On the flip side, because self-reported drug use is probably a good deal lower than real consumption, California could be seeing extreme green. Another study mentioned explicitly in the tax board’s review (one whose full implications are seemingly ignored) indicates that Californians could be consuming nearly 3 million pounds of pot a year.
So at the end of the joint is this bottom line: No one — neither the tax board nor weed advocates — really knows how much the Golden State is smoking. If the state legalizes marijuana, it could get a life-saving lift for its crumbling economy, or it could could see all its revenue-earning dreams go to pot.
Poll – LA Voters Oppose Plan to Close Med. Marijuana Dispensaries
A new poll of Los Angeles County voters reports massive opposition to Los Angeles County District Attorney Steve Cooley’s announced plan for a wholesale shutdown of medical marijuana dispensaries, with only 14 percent backing Cooley’s effort. After Cooley made his statement, Los Angeles City Attorney Carmen Trutanich proposed an ordinance that would effectively shut down all dispensaries in the city.
The survey of 625 randomly chosen L.A. County voters was conducted Oct. 19 and 20 by Mason-Dixon Polling and Research. The poll has a margin of error of plus or minus 4 percent.
Asked whether they support or oppose California’s medical marijuana law, including patients’ ability to buy their medical marijuana, 74 percent said they favor it, with 16 percent opposed and 10 percent undecided. Following that question, voters were asked about Cooley’s assertion that all medical marijuana dispensaries in the county are illegal and should be closed.
Asked, “Which of one these two alternatives come closest to your view: Prosecute or close all medical marijuana dispensaries in Los Angeles County, or create and enforce uniform licensing requirements and regulations for the operation of medical marijuana dispensaries within Los Angeles County,” 77 percent supported regulation, with only 14 percent backing a large-scale shutdown.
Support for regulating the dispensaries crossed all demographic groups, including a 62 to 30 percent margin among Republicans.
Los Angeles D.A. to Prosecute Medical Marijuana Sellers
Los Angeles County’s district attorney says he intends to prosecute owners of marijuana dispensaries that take cash for pot.
District Attorney Steve Cooley said Tuesday he believes state law only permits the possession, use and cultivation of medical pot — not sales.
Most dispensaries currently sell pot to those with doctor referrals and identification cards. Some patients grow pot and distribute it through the shops.
Cooley’s statement came after a pair of committees rejected City Attorney Carmen Trutanich’s proposal to ban sales of marijuana at dispensaries as part of an ordinance that could be voted on by the City Council on Wednesday.
In 1996, California voters approved a measure that allows medical use of pot.
Apply state sales tax to medical marijuana
In 2000, Colorado voters passed Amendment 20 to allow patients to use medical marijuana with a doctor’s certification. Communities across the state are grappling with the issue now. In Pueblo, City Council has placed a three-month and the county commissioners a four-month moratorium on whether to permit and regulate medical marijuana dispensaries. (Colorado Attorney General John Suthers last week gave Gov. Bill Ritter his formal opinion on applying the state sales tax to the purchase and sale of medical marijuana. Here are excerpts:)
http://www.chieftain.com/articles/2009/11/22/editorial/doc4b087ab672f62850919525.txt
Berkeley wants to tax medical marijuana
Berkeley is looking to medical marijuana as a way to raise badly needed cash as it faces a $14 million budget shortfall this year and probably more next year.
http://www.mercurynews.com/breaking-news/ci_14430905
San Jose votes on plan for allowing and taxing medical marijuana dispensaries.
As San Jose confronts a fiscal crisis forcing massive service cuts like closure of popular community centers, the City Council moved Tuesday toward allowing medicinal marijuana collectives as a potential new source of revenue.
http://www.mercurynews.com/bay-area-news/ci_14789403?source=rss&nclick_check=1
Colorado town 1st in state to pass medical-marijuana sales tax
Voters in the western Colorado town of Fruita on Tuesday approved a 5 percent sales tax on medical marijuana and related paraphernalia, making it the first city in Colorado to tax pot.
Fruita ― an agricultural community located west of Grand Junction near the Utah border ― doesn’t yet have any medical-marijuana dispensaries, which have proliferated in Denver over the past year.
The tax will go into effect on May 1. City officials expect it to raise about $100,000 in the first full fiscal year, despite the current lack of dispensaries, according to the ballot issue.
Nearly 60 percent of Fruita voters approved the tax, according to unofficial election results posted on the Fruita municipal website.
Colorado Attorney General John Suthers ruled last November that a sales tax could be imposed on medical pot.
“Colorado law is clear: Medical marijuana, in most instances, should be subject to state and local sales taxes,” Suthers said. “This formal opinion should help clear up many of the uncertainties surrounding the taxation of medical marijuana.”
Read more: Colorado town 1st in state to pass medical-marijuana sales tax – Denver Business Journal:
Marijuana tax among plans for cash-strapped US states
WASHINGTON: American states are scrambling to mend their battered budgets, with many resorting to so-called ”sin” taxes and other imposts, while slashing spending, in an attempt to bridge gaping holes inflicted by the recession.
http://www.smh.com.au/world/marijuana-tax-among-plans-for-cashstrapped-us-states-20100514-v4dy.html
IRS auditing Oakland medical marijuana dispensary
The Internal Revenue Service has been auditing 2008 and 2009 federal tax returns for an Oakland medical marijuana dispensary, the Sacramento Bee is reporting. Harborside Health Center, which also has a San Jose location, serves 70000 medical marijuana …
http://www.mercurynews.com/breaking-news/ci_17422701