Tax projections underscore uncertainty about marijuana popularity

  • AP File Photo AP File Photo

State House News Service
Published: 12/6/2017 12:39:40 PM

BOSTON — Newly legal marijuana sales could provide as much as $82 million in state tax revenue next fiscal year, the commissioner of revenue told lawmakers Wednesday.

The Cannabis Control Commission expects retail cannabis shops to begin opening July 1, 2018, the first day of fiscal year 2019, and lawmakers joined Baker administration officials Wednesday to try to get an early read on revenue expectations.

Non-medical marijuana sales will be subject to the state’s 6.25 percent sales tax, a 10.75 percent marijuana excise tax and a 3 percent local tax, rates that were set in a law passed by the Legislature this year amending the voter-approved marijuana legalization law of 2016.

With officials apparently uncertain about the popularity of marijuana, Revenue Commissioner Christopher Harding said the Department of Revenue estimated the state’s portion of marijuana taxes — effectively a 17 percent tax rate on sales — will come in between $44 million and $82 million in fiscal 2019.

“DOR analysis assumes that effective July 1, 2018 there will be a reasonable number of retail establishments that will be operational during fiscal year 2019 and that the Massachusetts experience in terms of per-capita consumption and the pace of sales ramping up is similar to that of other states where legalization has occurred, such as Colorado and Washington,” Harding told lawmakers at the annual consensus revenue hearing.

DOR did not include its marijuana tax projections in its overall tax collection projection for fiscal 2019, Harding said, and there remains “considerable uncertainty” about how many establishments will be selling legal pot at the start of the budget year.

The state could also see additional revenue this fiscal year and next from fees associated with marijuana establishment license applications but the CCC has not yet determined the structure of those costs.


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